Crypto investment products have experienced four consecutive weeks of inflows, as investors eagerly await the potential approval of a spot Bitcoin exchange-traded fund (ETF) in the United States. According to CoinShares’ fund flows report published on October 23, a total of $179 million was added to digital asset investment products in the week ending October 20, bringing the total assets under management in the space to $33 billion.
Out of the total inflows, $55.3 million, or 84%, went into Bitcoin investment products. This has contributed to a year-to-date Bitcoin product inflow of $315 million. However, James Butterfill, the Head of Research at CoinShares, pointed out that the recent inflows have not yet reached the levels seen earlier this year when BlackRock first filed for a spot Bitcoin ETF. Butterfill stated, “While the most recent inflows are likely linked to excitement over a spot Bitcoin ETF launch in the U.S., they are relatively low in comparison to the initial inflows following BlackRock’s announcement in June.”
In fact, the four-week inflow run in June saw a staggering $807 million entering the sector. The lower inflows in recent weeks indicate that investors may be adopting a more cautious approach this time.
In terms of specific cryptocurrencies, Solana (SOL) products received the second-largest share of inflows last week, attracting $15.5 million. Among all altcoins, Solana had the largest inflow. On the other hand, Ether (ETH) products experienced outflows of $7.4 million, making it the only altcoin to suffer outflows during the week.
The interest in a spot Bitcoin ETF surged on October 23 when there were “positive signs” that BlackRock’s ETF was one step closer to approval, and a U.S. Appellate Court issued a mandate to the Securities and Exchange Commission (SEC) to review Grayscale’s spot Bitcoin ETF filing. These developments sparked a Bitcoin rally, causing its price to increase by 14% in the past 24 hours and briefly reach $34,000 for the first time since May 2022.
The price surge also led to over $193 million in Bitcoin short liquidations in the past 24 hours, according to CoinGlass data. This indicates that traders who had bet against Bitcoin’s price were forced to close their positions at a loss.
The potential approval of a spot Bitcoin ETF in the U.S. has been a topic of great interest and anticipation for crypto investors. It is believed that the introduction of a regulated ETF would attract institutional investors and further legitimize the cryptocurrency market. As the market continues to wait for a decision on the ETF, inflows into crypto investment products remain steady, albeit not reaching the levels seen earlier this year.