Crypto ETPs Witness Record Inflows Amid Optimism Over Potential SEC Approval of Bitcoin-based ETF
Summary:
Cryptocurrency exchange-traded products (ETPs) experienced their largest weekly inflows in over a year, reaching $326 million in the week ending October 27, as per CoinShares. This surge, the greatest weekly inflow since July 2022, is attributed to growing investor optimism over the expected approval of a Bitcoin-based exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC). Despite this boost, the inflows only marked the 21st largest increase, with Bitcoin-based ETPs attracting the largest inflows. In contrast, Ether saw a $6 million outflow.
In the week ending on October 27, cryptocurrency exchange-traded products (ETPs) experienced their most substantial weekly inflows in over a year, with inflows totaling $326 million, a significant leap from the previous week's $66 million, as reported by CoinShares, an asset management platform, on October 30. This surge in inflows, the largest since July 2022, is believed to be due to increased investor confidence in the likely approval of a Bitcoin-based exchange-traded fund (ETF) by the U.S. Securities and Exchange Commission (SEC).
Cryptocurrency ETPs are a type of investment fund that tracks the price of well-established cryptocurrencies like Bitcoin or Ether. This allows investors to gauge cryptocurrency prices through these funds rather than holding the assets themselves as they can be kept in a conventional brokerage account. When the price of the fund rises faster than the underlying asset, resulting in more asset purchases by the fund, an "inflow" event occurs. The opposite is an "outflow" when the falling share or note prices cause the fund to sell the assets.
CoinShares' report highlighted that the inflows for the week ending on October 27 were the highest in 15 months, marking the fifth straight week of inflows. The data suggests that increased investor optimism over the possible approval of a Bitcoin-based ETF by the U.S. SEC could explain the recent inflow boost.
Despite the significant increase, CoinShares indicated that the inflows only represented the 21st largest increase ever. Bitcoin-based ETPs attracted the most considerable weekly inflows, accounting for 90% of the total. In contrast, Ether experienced a $6 million outflow, whereas Solana (SOL) also saw $24 million in inflows, demonstrating the continued optimism in the market.
Despite many submissions over the years, the U.S. SEC has yet to greenlight a Bitcoin-based ETP. On October 19, Van Eck amended its application to meet the SEC's concerns, while Hashdex met with the SEC on October 25 to push for approval of their Bitcoin ETP.
Published At
10/30/2023 8:01:58 PM
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