Spot ETF anticipation drives $346M into digital assets

Journalist

Posted: November 28, 2023

• The last two months have seen a steady flow of funds into crypto-backed investment products.
• Ethereum’s one-month run of inflows has almost corrected all the outflows it has recorded so far this year.

Digital asset investment products recorded inflows of $346 million last week. This represented the largest single week of fund flows in the nine consecutive weeks of inflows recorded so far, digital asset investment firm CoinShares found in a new report.

According to the report, last week’s surge in inflows was due to the anticipation of the launch of a spot-based ETF in the U.S.

CoinShares found that last week’s $346 million represented the largest weekly inflow since the bull market experienced during the 2021 market cycle. 

Source: CoinShares

During the week under consideration, many crypto assets recorded price upticks. Bitcoin [BTC] for example, saw its value rise by almost 5% between the 18th and the 24th of November. 

Due to the combined impact of increasing asset prices and inflows into crypto funds, total assets under management (AuM) reached a peak of $45.3 billion last week. The investment firm noted that this represented its highest level in the last 18 months.

On a regional level, most of last week’s flows into crypto funds came from Canada and Germany, with inflows of $199 million and $102 million, respectively.  As for the U.S., there was “low participation,” which CoinShares opined might be due to investors waiting for the ETF launch. 

Bitcoin’s year-to-date inflows crossed $1.5 billion

During the week under review, investment products backed by leading crypto BTC recorded inflows of $312 million. This represented 90% of all inflows seen in that week.

This significant inflow into BTC-backed products pushed the coin’s year-to-date (YTD) above $1.5 billion, and its month-to-date (MTD) inflow tethering closer to $1 billion. 

Within the week considered, BTC’s AUM totaled $32.3 billion, enjoying a 75% share of the entire market’s total AUM of $45 billion. 

As for short-Bitcoin products, they recorded their third week of consecutive outflows. This resulted in a significant decline in AuM. The report further stated:

“While short-sellers continue to capitulate, seeing the 3rd week of outflows totaling US$0.9m, with AuM having fallen by 61% since the April 2023 peak.”

Ethereum leads, while other altcoins follow

Signaling a “decisive turn-around in sentiment,” last week’s influx of $34 million marked the fourth-consecutive week of inflows for Ethereum [ETH].

Regarding other altcoins:

“Solana, Polkadot, and Chainlink saw inflows totalling US$3.5m, US$0.8m, and US$0.6m, respectively.”