Crypto Investment Products Attract $1.1 Billion Inflows Amid Bitcoin ETF Boom

Crypto investment products recorded strong inflows of $1.1 billion last week, bringing the total inflows for the year to $2.7 billion, according to a report by CoinShares, a digital asset investment firm. The inflows were driven by the high demand for the newly launched spot-based Bitcoin ETFs in the US, which accounted for almost 98% of the total inflows.

The report, titled “Digital Asset Fund Flows Weekly”, revealed that the total assets under management (AUM) of crypto investment products reached $59 billion, the highest level since early 2022, when the crypto market suffered a major crash due to the FTX hack and the regulatory crackdown in China.

The report also showed that the inflows into the new Bitcoin ETFs in the US did not slow down, despite the high premiums and fees associated with them. The new ETFs, which track the spot price of Bitcoin rather than the futures contracts, attracted $1.1 billion in inflows last week, bringing the total inflows since their launch on January 11, 2024, to $2.8 billion.

Source: CoinShares

The report noted that the outflows from the incumbent crypto investment products, such as the Grayscale Bitcoin Trust, have slowed significantly, but the potential sale of the Genesis holdings of $1.6 billion could trigger further outflows in the coming months. Genesis, a crypto lending and trading platform, announced in January that it would sell its stake in the Grayscale Bitcoin Trust, which it acquired in 2019, to diversify its portfolio and reduce its exposure to Bitcoin.

The report also highlighted the regional differences in the crypto investment product flows, with the US dominating the market, followed by Switzerland, Canada, and Germany. Switzerland saw $35 million in inflows last week, while Canada and Germany saw minor outflows of $17 million and $10 million respectively.

Besides Bitcoin, other crypto assets also saw inflows, albeit at a much smaller scale. Ethereum, the second-largest crypto asset by market capitalization, saw $16 million in inflows, while Cardano, the fifth-largest, saw $6 million. Other crypto assets that saw inflows include Avalanche, Polygon, and Tron, which saw $0.5 million, $0.4 million, and $0.4 million respectively.

Source: CoinShares

On the other hand, some crypto assets saw outflows, such as Uniswap and Short-bitcoin, which saw $0.5 million and $0.4 million respectively. The report also indicated that blockchain equities, which are stocks of companies that are involved in the crypto and blockchain industry, saw outflows of $67 million from one issuer, while all other issuers saw inflows of $19 million.

The report concluded that the crypto investment product market is showing signs of maturity and diversification, as more investors seek exposure to the crypto space through various vehicles and strategies. The report also suggested that the momentum of inflows into the new Bitcoin ETFs is not slowing down, as they offer a more convenient and accessible way to invest in Bitcoin.

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