Crypto investment products experienced a significant inflow of nearly $2 billion last week, contributing to a five-week total of over $4.3 billion, according to a Monday report by asset manager CoinShares. This surge in investment activity comes amidst rising trading volumes and renewed interest in both Bitcoin and Ethereum.
Record Inflows and Trading Volumes
Last week’s inflows into crypto investment products reached $1.97 billion for Bitcoin alone, marking a substantial portion of the total. Ethereum (ETH) also had its best week of inflows since March, attracting nearly $70 million. The overall trading volumes in exchange-traded products (ETPs) climbed to $12.8 billion, a 55% increase from the previous week.
Bitcoin ETF Activity
Investment activity for spot Bitcoin exchange-traded funds (ETFs) in the U.S. has been on an upward trajectory since mid-May. This resurgence follows a sluggish April that saw zero net inflows across all products and even outflows from major products such as BlackRock’s IBIT. However, inflows have since picked up, with IBIT becoming the largest Bitcoin ETF last week, amassing over $20 billion worth of assets since its January issuance.
Market Sentiment and Ethereum ETF Approval
CoinShares analyst James Butterfill noted that inflows were observed across almost all providers, with a notable slowdown in outflows from incumbents. The positive price action pushed total assets under management (AuM) above the $100 billion mark for the first time since March this year. Butterfill attributed the renewed buying activity in ETH to the surprise SEC decision to allow spot Ether ETFs.
In May, the SEC approved key regulatory filings for eight ETH ETFs from major asset managers, including VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest 21Shares, Invesco Galaxy, and BlackRock, for listing on exchanges such as Nasdaq, NYSE Arca, and Cboe BZX.
Future Projections for ETH
Traders and analysts expect continued inflows into ETH products in the coming months, potentially fueling a year-end rally. Ed Hindi, Chief Investment Officer at Tyr Capital, expressed optimism in an email to CoinDesk, suggesting that $5-10 billion of fresh capital could flow into Ether products in the short to medium term. This influx could drive ETH and its ecosystem to new record highs.
“A price target of $10,000 in 2024 is now a reasonable target especially when other supportive factors, like ETH now being deflationary, are taken into consideration,” Hindi added.
