Record-breaking $17.5 billion traded in crypto products following Bitcoin ETF debut

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Inflows into crypto-related investment products soared to more than $1 billion last week as investors piled in for the newly launched spot Bitcoin exchange-traded funds (ETF) in the U.S.

In its latest weekly report, CoinShares disclosed a notable uptick in the total inflow into cryptocurrency products, reaching $1.18 billion (subject to T+2 settlement) for the specified period.

While this figure represents a marked increase, it falls short of the $1.5 billion recorded in October 2021, when U.S. authorities approved futures-based Bitcoin ETFs.

Meanwhile, CoinShares noted that the trading volume for these crypto products soared to $17.5 billion last week, the highest on record. This is almost nine times higher than the average weekly volume of $2 billion in 2022.

James Butterfill, CoinShares’ head of research, wrote:

“These trading volumes represented almost 90% of daily trading volumes on trusted exchanges last Friday, unusually high as they typically average between 2%-10%.”

Bitcoin, U.S. dominates flows

A breakdown of the inflows by assets shows that Bitcoin saw the most, with $1.16 billion, representing 3% of BTC’s total assets under management (AuM) of $38.7 billion.

This trend was also extended to Short Bitcoin products as investors with bearish sentiments for the emerging industry invested over $4 million in bets against the space.

Other digital assets like Ethereum, XRP, and Solana observed notable inflows of $26 million, $2 million, and $200,000, respectively.

Similarly, blockchain equities saw large inflows totaling $98 million, bringing its total inflows over the last seven weeks to $608 million.

Across regions, the U.S. dominated the flow trend thanks to its recent approval of spot BTC ETFs. Per CoinShares, investors in the country poured $1.2 billion into the space, while other regions like Switzerland, Australia, and Brazil saw inflows of $21 million, $2.3 million, and $5.6 million, respectively.

On the other hand, investors in Canada and European countries like Germany and Sweden saw outflows of $44 million, $27 million, and $16 million.

The asset manager suggested that the outflows from these places could be linked to “basis traders looking to switch from Europe to the U.S.”

Meanwhile, Grayscale, one of the issuers of the newly launched ETFs, saw outflows of $579 million last week.

Bloomberg analyst Eric Balchunas suggested that the outflows could be attributed to investors fleeing the ETF’s high management fees and that traders might be taking profit from the significant closure of its previous discount.

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