In a remarkable week for digital assets, investment products related to cryptocurrencies recorded their second-highest weekly inflow ever, totaling a staggering $1.84 billion. This surge reflects a growing confidence among investors and a bullish momentum in the crypto market, suggesting a potential continuation of the current buying momentum. According to the latest weekly report from CoinShares, a leading digital asset investment firm, the trading volume of investment products also hit a new record, exceeding $30 billion last week.
Continuous ETF Inflow Boosts Market Confidence
According to Coinshares, investment products in the digital asset sector recorded their second-highest weekly inflows ever, reaching $1.84 billion. The week also saw a surge in trading volumes exceeding $30 billion, at points accounting for half of the global Bitcoin trading volumes on reputable exchanges.
Following recent price increases, the total assets under management (AUM) are now hovering close to the all-time high of $82.6 billion, narrowly missing the $86 billion record established in early November 2021.
The United States maintained its lead in the market, with net inflows hitting $1.88 billion. However, these gains were somewhat tempered by increased outflows from Grayscale’s Bitcoin ETF, which amounted to $1.46 billion.
Nevertheless, new issuers in the market compensated for this, contributing to a total inflow of $3.2 billion over the past week. Investment flows varied across different regions; Switzerland enjoyed inflows of $20 million, whereas Sweden, Germany, and Canada experienced outflows of $32 million, $35 million, and $23 million, respectively.
Bitcoin dominated the inflows, capturing 94% of the total with an impressive $1.72 billion. Despite this, the recent price movements prompted short investors to intensify their positions, adding an additional $22 million to short-Bitcoin investment products.
Ethereum experienced its highest weekly inflows since mid-July 2022, reaching $85 million. However, with assets under management (AUM) at $14.6 billion, it still falls short of its peak AUM of $23.7 billion.
Polygon received $7.6 million in inflows, which constitutes 22% of its AUM. In contrast, Solana faced outflows totaling $12 million.
Bitcoin (BTC) soared to its highest price level since 2021, approaching the all-time high of $69,000 set in November 2021, before experiencing a notable pullback. At the moment, the price is steadily holding above the $65,000 mark.
The significant uptrend in Bitcoin’s value is largely attributed to substantial capital inflows into the worldwide cryptocurrency market, fueled by the much-anticipated sanctioning of spot exchange-traded funds (ETFs) for *BTC* in the United States.
The green light for these ETFs has brought in billions of dollars of institutional investment, playing a crucial role in driving Bitcoin’s robust price surge.
Bitcoin ETFs Surpass Gold
In just over seven weeks, BlackRock’s iShares Bitcoin Trust (IBIT) has surpassed $10 billion in assets under management (AUM), a milestone that the first U.S. gold-backed ETF took more than two years to reach.
The AUM of BlackRock’s Bitcoin ETF hit the $10 billion mark on 1 March, approximately 39 trading days after its inception.
In contrast, the SPDR Gold Shares (GLD), the United States’ inaugural gold ETF launched in 2004, required over two years to achieve a similar scale of assets, as reported by the Zero Hedge finance blog.
In late February, Bloomberg’s ETF analyst Eric Balchunas remarked, “Bitcoin ETFs are benefiting at the expense of gold in the battle for the preferred store of value.” He further speculated that there’s a “good possibility” Bitcoin ETFs could overtake gold ETFs in assets under management within a timeframe shorter than two years.
Additionally, Bitcoin ETFs are now expanding as BlackRock’s iShares Bitcoin Trust ETF (IBIT) has commenced trading on Brazil’s B3 stock exchange, the firm announced last week. “This launch provides investors with an additional avenue to gain exposure to Bitcoin,” said Felipe Gonçalves, B3’s superintendent of interest and currency products, in a press release. He also noted, “The increasing global investor interest in the cryptocurrency market has driven demand for more options within the Brazilian capital market.”
