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Cash Flow into Bitcoin ETFs Making a Comeback
Recent reports indicate a resurgence in cash flow into Bitcoin exchange-traded funds (ETFs) after a five-week period of outflows. European asset manager CoinShares revealed that last week saw a substantial $130 million entering these funds. CoinShares meticulously tracks crypto funds across regions from the U.S. to Europe and Australia, noting a significant portion of the recent inflow into American funds, particularly the novel spot ETFs that offer traditional stock investors exposure to Bitcoin.
Ethereum-Related Fund Trends
Conversely, European investors seemed less enthused about Ethereum-related funds, withdrawing a total of $14 million. This move is attributed to bearish sentiments surrounding the anticipated approval of an Ethereum ETF. Notably, several prominent investment firms are eagerly waiting for the green light from the Securities and Exchange Commission (SEC) for an Ethereum ETF. Nevertheless, industry experts are skeptical about the likelihood of these products receiving prompt approval, if approved at all.
CoinShares highlighted, “Low interaction by the U.S. regulators with ETF issuer applications for a spot Ethereum ETF have increased speculation that the ETF approval is not imminent.” This hesitation from regulators was reflected in outflows amounting to $14 million in the past week.
Impact on Grayscale’s Bitcoin Trust
For Bitcoin investors, there is a glimmer of hope, as Grayscale’s Bitcoin Trust (GBTC) witnessed the lowest outflows since its transition to an ETF in January. The shift from a closed-end fund model to an ETF prompted investors to redeem shares in search of alternative options or profit-taking opportunities. These redemptions, in turn, exerted downward pressure on Bitcoin’s price. However, a recent shift occurred at the beginning of this month, with more investors opting to purchase GBTC shares rather than redeem them.
The inflow into GBTC could potentially drive up the asset’s price if a greater number of investors seek exposure to the leading cryptocurrency by market cap, as suggested by CoinShares.
Presently, Bitcoin is valued at $62,810 per coin, according to CoinGecko. Although it hit a record high close to $74,000 in March, the subsequent decline in price was attributed to waning enthusiasm surrounding ETFs. Notably, Bitcoin ETFs experienced significant outflows just two weeks ago, with investors withdrawing over half a billion dollars.
The recent influx of cash into Bitcoin ETFs raises the question: Are investors reigniting their interest in Bitcoin?
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