The inflow of capital into major crypto investment products was also positive last week. Data from crypto fund manager CoinShares shows that more money was invested in these products than was withdrawn for eight weeks in a row. Bitcoin (BTC) remained the king in this area.
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Crypto inflows skyrocket to $1.3 billion
CoinShares reports that $176 million was invested last week in funds like Grayscale and CoinShares itself. This is the 8th week that inflows have been positive.
However, the inflow is slightly down compared to previous weeks. Nevertheless, last week’s positive inflow brings the number of investments for 2023 to $1.3 billion. However, this is significantly less than in 2021 and 2020, when total inflows were $10.7 billion and $6.6 billion, respectively.
Investing in cryptocurrencies through exchange funds offers several advantages. This way, investors do not have to hold the cryptocurrency themselves and can gain access to cryptocurrencies through more traditional means, such as through a broker.
CoinShares notes that the relationship between crypto trading volume and the trading volume of these exchange funds has changed significantly:
“Interestingly, the ETP (Read, Exchange Fund) share of total crypto volume is increasing by an average of 11% compared to the long-term historical average of 3.4% and is well above the 2020/21 bull market averages.”
Bitcoin continues to reign supreme
The majority of inflows flowed into funds based on Bitcoin. No less than 155 million of the 176 million went to BTC funds. Another positive sign is that funds based on Bitcoin shorts actually saw outflows. Short selling allows investors to make a profit when the price of Bitcoin falls.
According to the researchers, the positive mood lies mainly in one corner:
“We believe this continued positive sentiment is related to the upcoming approval of a spot-based Bitcoin ETF in the US.”
Altcoins also recorded positive numbers. Solana funds raised 13.6 million and Ethereum funds 3.3 million. Small outflows were observed for exchange products Uniswap (-$550,000) and Polygon (-$860,000).
