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Digital Asset Fund Inflow Continues, Spot BTC ETF Could Drive Bitcoin to $141,000 – CoinShares

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(Kitco News) – Digital asset investment products have now seen eight consecutive weeks of inflows as total assets under management (AuM) for globally listed products rose by $176 million in the week ended November 17, according to the latest CoinShares fund flow report shows.

The year-to-date total now stands at $1.32 billion, showing interest from institutions is increasing, albeit a far cry from what it was during the last bull market.

“Inflows remain significantly behind 2021 and 2020, which saw $10.7 billion and $6.6 billion, respectively,” said James Butterfill, head of research at CoinShares. “Trading volume in ETPs averaged $3 billion per week, double this year’s average of $1.5 billion.”

Digital asset fund flows. Source: CoinShares

Butterfill added that “ETP share of total crypto volume is increasing, averaging 11% compared to the long-term historical average of 3.4% and well above the 2020/21 bull market averages.”

From a regional perspective, Canada saw the largest inflows with an increase of $98 million, while Germany and Switzerland recorded inflows of $63 million and $35 million, respectively. The U.S., which accounted for the largest share of inflows in the previous report, recorded $19 million worth of outflows last week, the largest outflows of any country.

Flows by country. Source: CoinShares

Bitcoin (BTC) continues to account for most inflows. Last week, $155 million was invested in these products, while short Bitcoin products saw outflows of $8.5 million.

Flows by asset. Source: CoinShares

Altcoins also continued their streak of inflows: Solana (SOL), Ether (ETH) and Avalanche (AVAX) recorded gains of $13.6 million, $3.3 million and $1.8 million, respectively.

Inflows into BTC over the past eight weeks accounted for 3.4% of total assets under management, Butterfill said. “We believe this continued positive sentiment is related to the upcoming approval of a spot-based Bitcoin ETF in the US,” he added.

A report from digital asset platform Finequia showed that crypto-based ETPs saw a 91% increase in total AUM between January 1 and October 31. The company’s study included data on 168 crypto ETPs from 21Shares, Grayscale Investment, VanEck Associates and others.

According to the study, Bitcoin accounts for 75% of total crypto ETP AuM.

Bundeep Singh Rangar, CEO of Fineqia, also attributed the surge in interest to the possible launch of a spot BTC ETF in the US: “The smoke signals point to a very likely and imminent approval of Bitcoin spot ETFs.” The market is simply reacting to this positive signal,” he said.

An estimated $14.4 billion in value could flow into these products in the year following their listing, according to a report published Friday by CoinShares on the potential impact of allowing spot BTC ETFs.

Based on estimates of $14.4 trillion in addressable assets in the U.S., “one could expect perhaps 10% to invest in a spot Bitcoin ETF with an average allocation of 1%, representing an inflow of 14.4% billion US dollars in the first year,” said Butterfill. “If correct, it would be the largest inflows on record, with the largest so far coming in 2021 when inflows of $7.24 billion were recorded, representing 11.5% of assets under management corresponds.”

“However, on a proportional basis, 2021 did not see the largest inflows, this was in 2020 where we saw inflows of $5.5 billion, a higher share of 21.6% of assets under management.” , he said. “It was also a year in which the price rose 303%, compared to 60% in 2021.”

Based on a model developed by CoinShares: “If we take into account the $14.4 billion in inflows mentioned above, the model suggests that the price could rise to $141,000 per Bitcoin,” Butterfill concluded.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; However, neither Kitco Metals Inc. nor the author can guarantee this accuracy. This article is for informational purposes only. It is not a request to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article accept no liability for any loss and/or damage arising from the use of this publication.

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