Crypto ETPs See Largest Weekly Inflows in Over a Year
Crypto exchange-traded products (ETPs) experienced their highest weekly inflows in more than a year, according to a report from CoinShares. Inflows for the week ending Oct. 27 reached $326 million, significantly surpassing the $66 million recorded the previous week.
What are ETPs?
ETPs are investment funds that track the price of a specific asset, such as Bitcoin or Ether. Investors can gain exposure to crypto prices through these funds without directly holding the assets themselves.
Inflows and Outflows
An ETP “inflow” occurs when the fund’s price rises faster than its underlying asset, resulting in the fund purchasing more of the asset. This is considered bullish for the asset. Conversely, an “outflow” happens when the fund needs to sell the asset due to declining prices of its notes or shares, which is seen as bearish.
Optimism for Bitcoin ETF Approval
CoinShares suggests that investors’ increasing optimism stems from expectations that the U.S. Securities and Exchange Commission (SEC) will approve a spot-based Bitcoin ETF in the United States. If approved, this could lead to further inflows into U.S.-based funds.
Bitcoin Dominates Inflows
The majority of last week’s inflows went into Bitcoin ETPs, accounting for 90% of the total. Solana’s SOL also benefited with $24 million in inflows. However, Ether funds experienced outflows worth $6 million.
SEC Approval Still Pending
Despite numerous applications, the SEC has yet to approve a spot Bitcoin ETP. Van Eck recently amended its application to address the agency’s concerns, while Hashdex met with the SEC in an effort to gain approval for their spot Bitcoin ETP.
Hot Take: Crypto ETPs Gain Momentum
The recent surge in inflows to crypto exchange-traded products (ETPs) indicates growing investor confidence and interest in the market. With the largest weekly inflows in over a year, reaching $326 million, it is clear that investors are optimistic about the potential approval of a spot-based Bitcoin ETF by the U.S. Securities and Exchange Commission (SEC). This positive sentiment has primarily benefited Bitcoin ETPs, which accounted for 90% of the total inflows. However, it’s worth noting that Ether funds experienced outflows during this period. As the industry awaits regulatory decisions, these significant inflows highlight the increasing mainstream adoption of cryptocurrencies through investment vehicles like ETPs.
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