Bitcoin ETF Sparks Crypto Boom: Over $1 Billion Surges into Funds

Investors injected over $1 billion into crypto funds following the approval of the first Bitcoin spot exchange-traded fund (ETF) in the US, reports CoinShares.

US Dominance in Crypto Inflows

In their recent report, CoinShares disclosed that crypto investment products witnessed a substantial $1.1 billion in inflows last week. The surge comes on the heels of the ProShares Bitcoin Strategy ETF launch, marking the first ETF directly linked to Bitcoin, not reliant on futures contracts.

US Leads with $1.24 Billion Inflows

James Butterfill, CoinShare's head of research, highlighted, "As expected, the United States dominated, seeing $1.24 billion of inflows last week."

Record-Breaking Trading Volumes

While the inflows didn't surpass the record set during the debut of Bitcoin futures ETFs in October, trading volumes reached unprecedented levels at $17.5 billion last week. This accounts for nearly 90% of daily volumes on established crypto exchanges.

Bitcoin Takes the Lead

The majority of funds flowed into Bitcoin products, attracting over $1.1 billion last week, constituting 3% of Bitcoin funds' total assets under management. Ethereum observed a $26 million influx, while XRP and Solana saw smaller inflows of $2.2 million and $500,000, respectively.

European Outflows and Basis Traders

Butterfill speculates that some outflows from European crypto funds might result from "basis traders" shifting to new US-listed products. Germany, Sweden, and Canada experienced outflows of $27 million, $16 million, and $44 million, respectively, while Switzerland saw $21 million return.

Interest in Blockchain Equities Funds

Beyond cryptocurrencies, funds focused on blockchain-centric equities also garnered attention, accumulating $98 million last week. Over the past 7 weeks, these stock funds concentrating on crypto and blockchain companies attracted a total of $608 million.

Anticipation and ETF Impact

The heightened activity follows months of anticipation for a spot Bitcoin ETF in the US, overcoming years of regulatory rejection. The ProShares ETF quickly became one of the most traded funds post-debut.

The approval of the first Bitcoin spot ETF in the US has significantly boosted investor confidence, leading to substantial inflows into crypto funds. The impact is felt not only in Bitcoin but also in blockchain-focused equities, reflecting a positive shift in market sentiment.