“Riding the wave of bitcoin ETF optimism, the crypto market witnesses a surge in product inflows, signaling a growing appetite for digital assets and a potential shift towards mainstream acceptance.”
Last week saw a significant increase in inflows into digital asset investment products, reaching a level not seen in 15 months. According to CoinShares data, these inflows reached $326 million, with Bitcoin products accounting for 90% of the total. This surge in inflows can be attributed to the improving sentiment surrounding the potential approval of a spot Bitcoin ETF by the US Securities and Exchange Commission (SEC).
James Butterfill, CoinShares head of research, noted that while this inflow is positive for Bitcoin, it is only the 21st largest on record, indicating that investors are still exercising caution. However, Butterfill believes that a spot-based ETF is highly likely to be approved in the coming months, which would represent a significant regulatory development for the industry.
The price of Bitcoin was around $34,650 on Monday morning, reflecting a 13% increase from the previous week. Asset management giant BlackRock and other issuers have been amending their Bitcoin ETF filings recently, suggesting ongoing dialogue with the SEC.
These inflows mark the fifth consecutive week of net asset gains for digital asset investment products. The total assets within crypto investment products now stand at $37.8 billion, the highest since May 2022. Inflows into products based in Canada and Germany were the highest, with $134 million and $82 million respectively. Only 12% of the flows came from the US, likely due to investors waiting for the approval of the spot-based ETF.
The SEC is expected to make a decision on a planned spot Bitcoin ETF proposed by Ark Invest and 21Shares by January 10. It is also anticipated that the regulator may rule on similar proposals by BlackRock, Fidelity, and other firms at that time.
In summary, the recent increase in inflows into digital asset investment products and the ongoing rally in the price of Bitcoin indicate growing optimism and anticipation for the approval of a spot Bitcoin ETF by the SEC.