Bitcoin Dominates Inflows to Crypto Products, Setting Record Weekly Flows
Bitcoin led the way as the United States dominated inflows to crypto-based products between February 12 and February 16, with year-to-date numbers reaching $5.2 billion. This surge in digital asset investment vehicles resulted in a record-breaking weekly flow of $2.4 billion, bringing assets under management (AUM) to levels last seen during the peak of the previous crypto bull cycle in December 2021. The total AUM rose to a 780-day high of $67 billion.
- Bitcoin and the U.S. accounted for about 99% of the week’s inflows, indicating strong demand for spot crypto products from issuers like BlackRock and Fidelity.
- Wall Street giants BlackRock and Fidelity have accumulated over $10 billion of the approximately $14 billion amassed by new spot Bitcoin ETF providers in less than two months.
- Bitcoin ETFs have seen $5 billion in net inflows since January 11, while Grayscale’s GBTC has lost $7 billion.
Investors are showing confidence in higher Bitcoin prices through their inflows into these spot BTC funds. However, some traders are hedging their bets and looking to profit from short-term price downturns by adding $5.8 million to Bitcoin’s short positions.
Ethereum Awaits SEC Decision on Spot ETH ETFs
Ethereum recorded the second-largest fund intake with $21 million in inflows as investors and speculators eagerly await a decision from the U.S. Securities and Exchange Commission (SEC) regarding spot ETH ETFs. On decentralized prediction platform Polymarket, users have locked $1.3 million in a smart contract titled “Ethereum ETF approved by May 31?”.
- Successful issuers of spot BTC ETFs have submitted bids for the same product backed by DeFi’s leading blockchain asset, Ethereum.
- SEC chair Gary Gensler has suggested that Ethereum ETFs may face different outcomes compared to Bitcoin ETFs, as decisions on these products have been postponed until May.
- Commissioner Hester Peirce, known as “crypto mom,” has urged the securities regulator to avoid another debacle.
Hot Take: Crypto Market Continues to Surge Amidst Bitcoin Dominance
The crypto market is experiencing a surge in inflows and record-breaking weekly flows, with Bitcoin leading the way. Investors are showing confidence in higher Bitcoin prices through their inflows into spot BTC funds. Additionally, Ethereum awaits a decision from the SEC regarding spot ETH ETFs, which could potentially impact the market. As the market continues to evolve and attract institutional investors, it is important for regulators to carefully consider their decisions and avoid any negative repercussions. The future of cryptocurrencies and their investment vehicles remains uncertain, but the current momentum suggests that crypto enthusiasts have much to be excited about.
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