Crypto Trading Hits Record $17.5 Billion After Bitcoin ETF Debut

Investor enthusiasm for the new U.S. spot bitcoin ETF drove more than $1 billion in inflows into crypto products.

Inflows into cryptocurrency-related investment products soared to more than $1 billion last week as investors flocked to the newly launched U.S. spot bitcoin exchange-traded fund (ETF).Bitcoin Miner

In its latest weekly report, CoinShares disclosed that total inflows into cryptocurrency products rose significantly to $1.18 billion in a given period (subject to T+2 settlement).

While this figure represents a significant increase, it is still lower than the $1.5 billion recorded in October 2021, when US authorities approved a futures-based bitcoin ETF.

Meanwhile, CoinShares noted that trading volume in these crypto products soared to a record high of $17.5 billion last week. That’s almost nine times the average weekly volume of $2 billion in 2022.

James Butterfill, head of research at CoinShares, wrote:

“These volumes accounted for almost 90% of the daily volume on trusted exchanges last Friday, unusually high as they usually average between 2%-10%.”

Bitcoin, U.S. dominate flows

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

This trend extended to shorting Bitcoin products as well, as investors with a bearish sentiment towards the emerging sector invested over $4 million in the space.

Other digital assets such as Ether, XRP and Solana saw inflows of $26 million, $2 million and $200,000 respectively.

Similarly, blockchain stocks saw inflows totaling $98 million, bringing their total inflows over the past seven weeks to $608 million.

By region, the U.S. dominated the flow trends due to the recent approval of the Spot BTC ETF. According to CoinShares, investors in the country poured $1.2 billion into the space, while other regions such as Switzerland, Australia and Brazil invested $21 million, $2.3 million and $5.6 million, respectively.ETC Miner Asic

On the other hand, investors from Canada and European countries such as Germany and Sweden saw outflows of $44 million, $27 million and $16 million, respectively.

The asset manager said the outflows from these places could be related to “basis traders looking to move from Europe to the US”.

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

Bloomberg analyst Eric Balchunas said the outflows may be due to investors fleeing the ETF’s high management fees, while traders may be profiting from the fund’s previously steep discounts.