Bitcoin’s surge to its highest level since April sparks bullish sentiment among traders.
Weekly Inflows into Digital Assets Skyrocket to $199 Million, Reaching Highest Level Since July 2022. Bitcoin Emerges as the Key Beneficiary, Attracting a Significant $187 Million in Inflows.
Remarkable Surge of $199 Million in Weekly Inflows Boosts Crypto Asset Investment Products to Highest Level Since July 2022. Notably, These Inflows Counterbalance Half of the Outflows Seen in the Previous Nine Weeks. Furthermore, Exchange-Traded Product (ETP) Trading Volumes Skyrocketed to $2.5 Billion, Reflecting a Massive 170% Surge Compared to the Average Volume of the Year.
Weekly Inflows Into The Crypto Market Reached Their Highest Level Since July 2022
The surge in positive sentiment can be credited to the recent remarks made by notable ETP issuers who have filed for physically backed ETFs with the US Securities & Exchange Commission. This update was disclosed in CoinShares’ weekly fund report, as reported by the European digital asset management firm.
Bitcoin emerged as the primary beneficiary once again, receiving a substantial $188 million in crypto inflows last week, which accounted for an impressive 94% of the total flows. In contrast, short positions on Bitcoin experienced outflows for the ninth consecutive week, totaling $4.9 million. These outflows constituted 60% of the total Assets under Management (AuM) for the nine-week period.
In contrast to Bitcoin, which saw inflows amounting to 0.7%, Ethereum only received $7.8 million in inflows, equivalent to just 0.1% of the total market capitalization. These figures indicate that Ethereum currently holds less popularity compared to Bitcoin.
Bitcoin Continues To Remain In The Spotlight
Altcoins, such as XRP and Solana, experienced minimal inflows of only $0.24 million and $0.17 million, respectively, indicating that the shift in sentiment primarily focused on other cryptocurrencies. Nevertheless, the increased optimism did lead certain investors to allocate $8 million towards multi-asset investing Exchange-Traded Products (ETPs) during the previous week.
Furthermore, the total assets under management for cryptocurrency investment products reached a new yearly peak, surpassing $37 billion. This milestone marks the recovery from the losses incurred since the unexpected bankruptcy of Three Arrows Capital in July 2022, which had a significant impact on the cryptocurrency industry.
London-based ETC Issuance GmbH saw the largest weekly inflow of $77.3 million for their Bitcoin exchange-traded instrument, BTCE. In the United States, the ProShares Bitcoin Strategy ETF (BITO) attracted significant inflows amounting to $60.4 million. BITO, established in October 2021, tracks the price of Bitcoin by strategically investing in CME Bitcoin Futures. With the influx of funds from the previous week, BITO’s total assets under management have now reached $1 billion.
James Butterfill of CoinShares attributed the “renewed positive sentiment” to a recent surge in spot Bitcoin ETF applications submitted to the U.S. Securities and Exchange Commission. However, this optimistic sentiment did not extend to altcoins, as evidenced by relatively modest inflows into XRP and Solana (SOL), according to Butterfill.
The Initiation Of The ETF Application By Blackrock Caused A Significant Uproar
The world’s largest investment fund, BlackRock, kickstarted the market by filing an ETF application on June 16. Following BlackRock’s submission, other fund managers such as Valkyrie, WisdomTree, and Invesco also promptly submitted their own applications within a week.
Markus Thielen, the head of research at Matrixport, a digital asset service platform, suggests that the Securities and Exchange Commission (SEC) might approve BlackRock’s request by September to October 2023, at the earliest (after a 45-day period). Thielen further predicts that the iShares Bitcoin Trust ETF, if approved, could accumulate approximately $10 billion worth of Bitcoin holdings by the end of 2023.
Throughout its history, BlackRock has submitted a total of 575 ETF applications, with only one of them being rejected. This track record suggests a strong likelihood of approval for their current application. If the regulatory standards are met, approving the application would also showcase the Securities and Exchange Commission’s (SEC) forward-thinking approach, as noted by Thielen.
In a tweet posted earlier today, Eric Balchunas, a senior ETF analyst at Bloomberg, highlighted that BITO also achieved a new record in trading volume on Friday, with “half a billion in shares” being exchanged. This level of trading activity had only occurred approximately five times before.
Bitcoin Hits Highest Level Since April as Traders Turn Bullish
Investor confidence in institutional involvement in digital assets is growing, despite recent negative news surrounding the cryptocurrency industry, such as the collapse of FTX and subsequent regulatory repercussions.
The announcement of spot Bitcoin ETF applications by major institutions has rejuvenated bullish sentiment in the crypto markets, according to Vijay Ayyar, head of foreign markets at CoinDCX, India’s largest cryptocurrency exchange.
Although Bitcoin experienced a slight decline during Asian trading on Monday afternoon, it remained above $30,000. The overall market sentiment remained positive, with a 15% increase in Bitcoin’s value over the week, driven primarily by spot buying rather than short liquidation. However, apart from BNB and XRP, Ether and the top 10 non-stablecoin cryptocurrencies witnessed a decrease in value over a single day.