Buoyed by the historic launch of ten Bitcoin spot ETFs, total inflows into cryptocurrency investment products surpassed the $1 billion mark last week – an impressive showing and an amount five times larger than the previous week.
Total global flows into exchange-traded products (ETPs) reached $1.18 billion last week, according to a new report from CoinShares. All of these gains came from the United States, which added a net $1.24 billion to the cryptocurrency economy. Slight outflows from Europe offset those gains.
Although these numbers are impressive, they do not break records. In October 2021, thanks to the launch of Bitcoin futures ETFs, the cryptocurrency sector saw record inflows of $1.5 billion in one week.
Bitcoin futures ETFs track the price of derivatives contracts, which itself gives the buyer the ability to buy or sell Bitcoin at a later date. Bitcoin is not actually bought and sold when buying and selling futures ETFs. Spot ETFs, like the one that debuted last week, are different; Its issuers actually purchase and store Bitcoin on behalf of their clients.
However, last week set a different record: net trading volume for ETFs in the cryptocurrency industry last week exceeded $17.5 billion, the largest amount ever recorded in a seven-day period.
This massive rise is directly due to Bitcoin ETFs, which have seen… With a value of $4.5 billion of trading on their first day alone. The discrepancy between this larger number and net inflows is due in part to the transfer of assets already inside cryptocurrencies into new Bitcoin ETFs, and also to the large amount of funds transferred when Grayscale converted Bitcoin Trust To the ETF on Thursday.
The Grayscale Bitcoin ETF also saw a significant rise flows last week, likely due to relatively high product fees.
While last week's Bitcoin ETF numbers were certainly promising, analysts warned that less emphasis should be placed on the opening performance of financial products – as ETFs are often considered and taken into account for the long term by Wall Street investors.
Edited by Andrew Hayward
