Spot Bitcoin ETFs Make Waves in the Crypto Space: CoinShares Report
Spot Bitcoin ETFs are taking center stage, as highlighted in a recent report from CoinShares released on January 15. According to the blog post by the digital assets investment firm, the crypto space witnessed an impressive $1.18 billion inflow in the past week.
Delving into the specifics, CoinShares' James Butterfill pointed out that the lion's share of these funds flowed into the US market, totaling $1.24 billion, while the European market saw more modest inflows during the same period.
While the recent inflows are significant, Butterfill observes that they fall short of the record set at the launch of Bitcoin futures exchange-traded funds (ETFs) in October 2021, which garnered up to $1.5 billion.
The report attributes the shift from the European institutional crypto landscape to the US market to the recent approval of a spot Bitcoin ETF by the US Securities and Exchange Commission (SEC).
Additional data in the report reveals that month-to-date (MTD) inflows to the US institutional crypto market reached a robust $1.322 billion, matching the year-to-date (YTD) figure. The total assets under management (AUM) for the US market reached $40.024 billion.
ProShares ETFs in the US followed a similar trajectory, attracting $265 million in the past week, with MTD inflows standing at $337.4 million.
The CoinShares report highlights Bitcoin as the primary beneficiary of the inflows, with a substantial $1.141.8 billion worth of Bitcoin assets making their way into the US market.
Spot Bitcoin ETFs have been making waves in the nascent crypto ecosystem over the last two years.
The regulatory approval process faced challenges, with concerns about market manipulation and insufficient mechanisms to track the performance of the leading crypto asset.
However, after a two-year delay, the US Securities and Exchange Commission (SEC) gave the green light for the rollout of the crypto-backed service on January 10.
In a significant move, the SEC approved 12 spot Bitcoin ETF applications, including those from prominent firms like BlackRock, Fidelity, WisdomTree, and nine others.
The impact of this shift in market dynamics is not limited to the European landscape alone. The Canadian crypto market experienced substantial negative inflows, resulting in a weekly outflow totaling -44.2. Germany and Sweden also felt the repercussions, showing negatives of -27 and -15.5, respectively.
Corroborating this trend, a BitMEX Research post on X (formerly Twitter) noted that on January 17, $30 million was moved out of the European markets across all the top four largest European crypto products. The total outflow amounted to a significant $106 million for that day.
BitMEX Research provided insights into these outflows, revealing that European investors are swiftly moving funds out of high-fee Bitcoin exchange-traded products (ETPs) in favor of more cost-effective spot Bitcoin ETFs available in the US market.
CoinShares' Luke Nolan also emphasized the convenience for institutions in using a domestic spot Bitcoin ETF for executing the same basis trades.
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