November 29, 2023

Canada and Germany Lead Crypto ETP Inflows, Adding a Record $346 Million to Funds

Bitcoin and ether headline the most significant surge in crypto investments since 2021, signaling renewed investor confidence.

Last week, digital asset investment products experienced an impressive influx of capital, reaching a substantial $346 million, as per the latest data from CoinShares.

This amount marks the most substantial weekly inflow in a consecutive nine-week span, reminiscent of the enthusiasm witnessed during the late 2021 bull market. The reported figures indicate that this surge in inflows has propelled the total assets under management (AUM) to an astonishing $45.3 billion, the highest in over eighteen months.

Canada and Germany played a dominant role, contributing 87% of the total, with inflows of $199.1 million and $101.5 million, respectively. In contrast, the United States saw a relatively modest $30 million, possibly reflecting investor anticipation for a spot-based Exchange-Traded Fund (ETF) launch in the country.

However, the U.S. maintains a significantly higher amount of assets under management, totaling $33.1 billion, more than ten times the next highest country.

Last week, bitcoin (BTC) witnessed an influx of $311.5 million, pushing year-to-date inflows past $1.5 billion. This robust accumulation coincides with a retreat of short-sellers, evident in the third consecutive week of outflows totaling $900,000 from short-bitcoin ETPs.

Ether (ETH) followed suit with $33.5 million in inflows, contributing to a four-week total of $103 million. This trend nearly offsets the year's prior outflows and signifies a definitive shift in investor sentiment for the second-largest digital asset by market capitalization.

While capital inflows into other cryptocurrencies like Solana, Polkadot, and Chainlink are comparatively modest, they indicate a diversified investment interest within the sector. The sustained use of Exchange-Traded Products (ETPs) underscores an increasing preference for regulated financial instruments to gain exposure to crypto, with ETPs representing 18% of total spot bitcoin volumes last week.

This financial movement aligns with the heightened anticipation of a U.S.-based spot ETF. The rise in AUM and consistent inflows into both primary and alternative digital assets suggest a growing optimism in the market or, at the very least, a bet on the potential of a more regulated and accessible cryptocurrency investment landscape.

Butterfill noted a "decisive turn-around in sentiment", and the data appears to capture an industry at an inflection point, with investor sentiment and market dynamics aligning in a way that could shape the trajectory of the crypto market in the foreseeable future.

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