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Crypto Investment Products Experience First Inflow in Over a Month
Crypto-related investment products recently saw a turnaround with the first inflow in over a month, amounting to $130 million in the past week, based on the latest weekly report from CoinShares.
This recent shift in investor sentiment comes after a period of negative flows across the cryptocurrency market. Despite the inflow, investor participation in the asset class did not see a significant improvement, with ETP volumes continuing to decline.
Insights from CoinShares Research Head
James Butterfill, the head of CoinShares research, highlighted that the trading volume for the previous week was $8 billion, significantly lower compared to the $17 billion average witnessed in April. He noted, “These volumes highlight ETP investors are participating less in the crypto ecosystem at present, representing 22% of total volumes on global trusted exchanges relative to 31% last month.”
The report from CoinShares also revealed that spot Bitcoin ETFs in the US and Hong Kong remain key drivers of inflows into crypto products.
In the US, the Newborn Nine Bitcoin ETFs led inflows, totaling $135 million. On the contrary, outflows from Grayscale’s GBTC decreased to $171 million during the past week, marking the lowest weekly outflows since January.
In Hong Kong, newly launched Bitcoin ETFs attracted a more modest inflow of $19 million, indicating that most of the inflows in the initial week post-launch were seed capital.
However, Canada and Germany experienced outflows in crypto-related ETPs, amounting to $20 million and $15 million respectively, bringing the year-to-date outflows from these regions to a total of $660 million.
Ethereum ETF Speculation and Outflows
CoinShares noted that uncertainty surrounding spot Ethereum ETF products has impacted investor confidence in the second-largest digital asset by market capitalization.
The firm mentioned, “Low interaction by the US regulators with ETF issuer applications for a spot Ethereum ETF have increased speculation that the ETF approval is not imminent, this has been reflected in outflows which totalled $14 million last week.”
Furthermore, short-Bitcoin recorded $5.1 million in outflows, extending its 8-week consecutive outflow to $18 million. In contrast, other altcoins like Polkadot, XRP, and Solana witnessed a combined inflow of approximately $8 million.
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