Bitcoin and Solana Lead Institutional Inflows into Digital Asset Investment Products
Last week, Bitcoin and Solana saw the highest amount of institutional inflows into digital asset investment products, according to a CoinShares report. Bitcoin accounted for 99% of all flows, with $703 million in inflows. Solana came in second with $13 million, outperforming Ethereum which had $6.4 million in inflows.
Spot Bitcoin ETFs Garner Significant Inflows
The focus was on Spot Bitcoin ETFs in the US, which received $721 million in inflows last week. These funds have averaged $1.9 billion in inflows over the past four weeks, reaching a total of $7.7 billion since their launch. However, Grayscale’s GBTC has contributed to the $6 billion in outflows these funds have experienced so far.
Recent weeks have seen a slowdown in outflows from GBTC investors, while other Spot Bitcoin ETFs have overshadowed GBTC’s outflows.
Drop in Trading Volume for Digital Asset Investment Products
Last week witnessed a decline in trading volume for digital asset investment products. Trading volumes in ETPs fell to $8.2 billion compared to the previous week’s total of $10.6 billion. This decline was particularly evident in the trading volume of Spot Bitcoin ETFs.
On February 1, these funds recorded a daily trading volume under $1 billion for the first time, and this trend continued the following day.
No Need for Alarm Over Trading Volume Decline
Bloomberg analyst Eric Balchunas reassured that there is no cause for concern regarding the decline in trading volume after a big launch. He noted that there is typically a slow decline after a hyped launch. The performance of these funds so far has lived up to expectations, with BlackRock and Fidelity alone holding over 134,358 BTC ($5.7 billion) for their Spot Bitcoin ETFs.
The impressive interest in these funds and their inclusion in the top 10 ETF inflows in January indicates increasing institutional adoption of Bitcoin.
Hot Take: Institutional Inflows Boost Bitcoin and Solana, Spot Bitcoin ETFs Show Promise
The latest CoinShares report reveals that Bitcoin and Solana are attracting significant institutional inflows into digital asset investment products. Bitcoin dominated with $703 million in inflows, while Solana outperformed Ethereum with $13 million. Additionally, Spot Bitcoin ETFs in the US received $721 million in inflows last week and have shown strong performance since their launch. Despite a decline in trading volume, industry experts suggest that this is a normal occurrence following a highly anticipated launch. The growing interest from institutions, as seen with BlackRock and Fidelity’s significant holdings, signals a rising trend of institutional adoption for Bitcoin.
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