Inflows Surge Amid Potential Bitcoin ETF Approval
Digital asset investment funds witnessed a significant net outflow of $326 million last week, marking the largest single week of outflows since July 2022. However, despite the outflows, investor interest continues to grow due to growing optimism surrounding the potential approval of a spot-based Bitcoin exchange-traded fund (ETF) by the US Securities and Exchange Commission (SEC).
“Month-to-date inflows are now close to half a billion dollars,” according to CoinShares’ recent report. This surge in inflows indicates an increase in investor confidence, although caution is still being exercised.
Potential Approval of Bitcoin ETF
While the weekly inflow is positive for Bitcoin, it ranks as only the 21st largest on record. Nevertheless, industry experts believe that the approval of a spot-based Bitcoin ETF in the coming months is highly likely, which would be a significant regulatory milestone for the industry and potentially drive further investment.
Regionally, the United States accounted for only 12% of the inflows, with $38 million, as investors eagerly await the potential launch of the spot-based ETF. Canada, Germany, and Switzerland were the major contributors to the inflows, with inflows of $134 million, $82 million, and $50 million, respectively. Interestingly, Asia also witnessed a surge in weekly inflows, reaching $28 million.
With total assets under management now standing at $37.8 billion, the highest since May 2022, the digital asset market is experiencing substantial growth.
“Bitcoin dominated the inflows, capturing 90% of the total at $296 million,” said the CoinShares report, reflecting the continued popularity and dominance of the cryptocurrency.
In addition to Bitcoin, Solana experienced significant inflows of $24 million. However, Ethereum experienced outflows totaling $6 million, suggesting a wave of optimism primarily focused on Bitcoin and fewer altcoins.
Rise in Bitcoin’s Price and Trading Volumes
The anticipation of a spot ETF approval has led to a surge in Bitcoin’s price in recent weeks. The cryptocurrency rallied towards $35,000 earlier this month, driven by market speculation surrounding the potential approval of a spot ETF.
This surge in price has not only caught the attention of investors but has also sparked a renewed interest in crypto trading, leading to a significant increase in daily exchange volumes. As reported, the seven-day moving average for spot exchange volumes across reputable platforms breached an impressive $24 billion on October 26, a level not seen since the end of March.
