Cryptocurrency exchange-traded products (ETPs) saw their largest weekly inflows in more than a year, according to an Oct. 30 report from asset management platform CoinShares.inflow yes Revenue was $326 million for the week ended Oct. 27, dwarfing the $66 million the week before.
Digital asset investment products saw an inflow of US$326 million, the largest single-week inflow since July 2022!
These numbers come amid what we believe is rising investor optimism that the SEC is preparing to approve a spot-based Bitcoin ETF in the United States.
– #bitcoin –… pic.twitter.com/AbgsgjcaOz
— CoinShares (@CoinSharesCo) October 30, 2023
ETPs are investment funds whose notes or shares are designed to track the price of a specific asset. When it comes to cryptocurrency ETPs, they typically track the price of large-cap cryptocurrencies, such as Bitcoin (BTC) or Ethereum (ETH). Some investors prefer to have exposure to cryptocurrency prices through funds rather than holding the assets themselves because shares in these funds can be held in traditional brokerage accounts.
ETP “inflows” occur when a fund’s price rises faster than its underlying asset, causing the fund to purchase the asset. This is generally seen as bullish for the underlying asset. In contrast, an “outflow” occurs when a fund has to sell assets because the price of a note or stock has declined relative to its target (which is typically considered bearish).
According to a CoinShares report, weekly inflows for the week ending October 27 were $326 million. This is the highest level since July 2022, 15 months ago. This is also the fifth consecutive week of ETP inflows.
related: Gary Gensler says his Bitcoin ETF position is ‘inconsistent’
According to CoinShares, one possible explanation for the sudden increase in inflows could be “growing investor optimism that the SEC is preparing to approve a spot-based Bitcoin ETF in the U.S.,” which could lead to inflows being diverted to the U.S. upon approval fund.
CoinShares said that despite the significant increase in inflows, this week marked only the 21st largest increase ever. The largest weekly inflows last week were into Bitcoin ETPs, accounting for 90% of the total. Solana’s SOL (SOL) also benefited from the optimism prevailing in the market, with inflows reaching $24 million. However, the Ethereum Fund went in the opposite direction and suffered an outflow worth $6 million.
Despite multiple filings over the years, the SEC has yet to approve a spot Bitcoin ETP. Van Eck revised its application on Oct. 19, presumably to satisfy the agency’s concerns. Hashdex also met with the SEC on October 25 to seek approval for its spot Bitcoin ETP.
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