Bullish Start for 2024: Digital Assets See $151M Inflow in First Week
Summary:
Digital asset investment products (ETPs) witnessed an inflow of $151 million in the first week of 2024, pushing total inflows to $2.3 billion since the Grayscale vs. SEC lawsuit, according to CoinShares. This rise, largely driven by US-based exchanges, suggests a bullish trend for the crypto sector, especially Bitcoin (BTC). With the possibility of the US approving its first spot Bitcoin ETF, key cryptocurrenices like Bitcoin, Ether, Cardano, Avalanche, and Litecoin saw significant inflows. The year 2024 started positively with events like the potential approval of the US's first Bitcoin ETF and the upcoming Bitcoin halving.
During the first week of 2024, digital asset investment instruments, also known as exchange-traded products (ETPs), garnered an inflow of $151 million, based on CoinShares' data. This brought the total influx to $2.3 billion ever since the Grayscale and SEC legal dispute. The recent investment flow figures suggest a strong outlook for the crypto segment, particularly with the likelihood of the US approving its first spot Bitcoin ETF. The bulk (55%) of this investment flow came from US-based exchanges in the previous week.
Bitcoin (BTC) made up the largest proportion of these inflows, accounting for $113 million. This was then followed by Ethereum (ETH) at $29.6 million. Other digital currencies, including Cardano (ADA), Avalanche (AVAX), and Litecoin (LTC), likewise drew in significant inflows, amassing $3.7 million, $2 million, and $1.4 million respectively.
There was a notable outflow exceeding $1 million from Bitcoin short positions, further strengthening Bitcoin's bullish outlook. This contradicts earlier claims that the approval of the BTC ETF might trigger a "buy the rumor, sell the news" effect as recently, there has been a significant reduction in investment in Bitcoin short ETPs.
On January 8, nearly half a billion was traded through Grayscale’s Bitcoin Trust (GBTC), outdoing more than 99% of the market's 3,000 current ETFs. In tandem, Bitcoin's price climbed to a new annual peak of over $46,000 and is currently valued at $46,865.
Investors see ETPs as a cost-effective and regulated means of delving into cryptocurrency investments. These financial tools, traded on a regulated stock exchange, offer investors exposure to crypto asset price variations without having to own the asset itself.
The crypto sphere saw the dawn of 2024 with a hopeful outlook, marked by key developments like the anticipated approval of the US's inaugural Bitcoin ETF, slated for the year's second week, and the Bitcoin halving planned for later in April. The crypto market is viewed with optimism given the recent positive net flow into multiple crypto ETPs and an outflow from Bitcoin ETPs. Yet an increased focus remains on specific issues, such as the use of cryptocurrencies as a lever in conflicts like the Israel-Gaza war and in activities related to terrorism.
Published At
1/9/2024 11:53:49 AM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.