Crypto Investment Funds See Over $1 Billion Surge After Spot Bitcoin ETF Approval

Digital asset manager CoinShares reported an influx of over $1 billion into cryptocurrency-focused investment funds during the past week, following the approval by the United States Securities and Exchange Commission (SEC) of the first physically-backed spot Bitcoin exchange-traded funds (ETFs) last month.

According to the report, crypto-related funds experienced net inflows of $1.115 billion during the week ending on February 11th. The majority of that money, around $1.089 billion, went into the new US spot Bitcoin ETFs.

Among the leading ETFs identified by CoinShares are BlackRock’s iShares fund and Fidelity’s ETFs, which collectively received inflows totalling $2.8 billion since their approvals.

“The focus remained on the newly issued spot-based Bitcoin ETFs in the US, which saw net inflows of US$1.1 billion last week, bringing inflows since the January 11th launch to US$2.8 billion,” highlighted the report.

Grayscale’s ETF and ProShares’ ETF continued to register significant outflows.

Institutions Bet on Bitcoin as Halving Approaches

CoinShares noted that the surge of institutional money comes at a time when Bitcoin is experiencing a strong uptrend, surpassing the $50,000 psychological barrier for the first time since 2021.

Additionally, the positive sentiment towards Bitcoin has also strongly boosted other cryptocurrency funds such as Ethereum (ETH: $16.5 million), Cardano (ADA: $6.1 million inflow), and Solana (SOL: $0.1 million inflows), which reported net inflows exceeding $22 million during the past week.

While CoinShares warned of possible fund outflows due to the future sale of assets by the bankrupt Genesis fund, the overall outlook remains encouraging for the crypto industry with the emergence of major institutional players, particularly as the market prepares for the arrival of the Bitcoin halving.

Recently, digital asset manager Grayscale predicted in a new report titled “2024 Halving: This Time It’s Actually Different,” that the upcoming Bitcoin halving in 2024 will unfold differently from the three previous ones, highlighting the impact on the market of the newly approved Bitcoin ETFs and the entry of Ordinals, two new products that did not exist a year ago.

Grayscale emphasized that Bitcoin ETFs provide a “new and steady source of demand” that could counterbalance selling pressure from miners once the halving is implemented and their rewards are halved in April 2024.

Indeed, 2024 looks very promising for BTC, which, at the time of writing this note, is trading at $51,611 after having seen an increase of over 5% in the last 24 hours.