Bitcoin Dominates Investment Share, CoinShares Attributes to Spot ETF Hype
CoinShares is reporting that the leading crypto by market capitalization is attracting the lion’s share of weekly investment. The analytic firm attributed the trend to investors’ pursuing additional exposure to the ‘digital gold’ amid hype for the looming approval of spot Bitcoin ETF.
The recent report by Coinshares revealed that investments flowing into the institutional crypto products sustained a positive trend for the fourth consecutive week. The analytics firm clarified that its analysis excluded the direct crypto holdings. Instead, it tracked the exchange-traded products, tracking cryptos offered by Proshares, 21shares, and Grayscale.
Bitcoin Dominance Surges in Weekly Investment
CoinShares reports the previous week’s aggregate as $66 million. The report shows that Bitcoin attracted a dominant 83.7%, translating to a $55.3 million investment.
The Swiss-headquartered 21SharesAG realized the most significant inflow at $45.5 million, nearly quadrupling the second-ranked ETC Group. The German digital securities firm attained the second-largest inflow at $12.2 million.
CoinShares noted that the US-based ProShares Bitcoin Strategy ETF suffered a $10.7M weekly outflow to raise its monthly outflows to $20.1 million. Overall, the futures-based Bitcoin product retains leadership in 2023 inflows with an estimated $238 million investment.
CoinShares’ James Butterfill attributed the positive inflows portrayed by Bitcoin to the prevailing hype of the elusive spot Bitcoin ETF likely to launch in the United States. The movement is unsurprising, with the fake news of Ishares ETF approval triggering a Bitcoin price rally on Monday before the Securities and Exchange Commission (SEC) and BlackRock denounced the article by crypto news platform Cointelegraph as mere rumors.
A comparison of the four-week investments executed in June 2023 when BlackRock declared a bid for the spot Bitcoin ETF shows the recent activities as relatively mild. The four-week investment aggregated to $807 million in June compared to just $179 million inflows reported in October-to-date.
Butterfill attributed the modest inflows as indicative of investors exercising a cautious pursuit of investment. A review of the fortnightly activities reveals three Bitcoin ETF applicants amending their filings. The decision by Ark Invest, Fidelity, and, more recently, BlackRock led some experts to infer and label the adjustments as a positive development.
A notable development was DCG’s Grayscale Investments filing a fresh registration application on Thursday, October 19. The application reiterates Grayscale’s intention to convert the Bitcoin Trust Shares (GBTC) into a more lucrative ETF. Grayscale’s move comes weeks after the asset management firm triumphed over the Gary Gensler-led SEC over its earlier rejection.
Solana Sustains Uptick in Inflows
A comparative outlook of altcoin performance shows Solana leading the alternative tokens behind Bitcoin. Solana is emerging as a favorable investment choice for many investors. The seventh largest crypto asset by market capitalization of $12.9 billion, per CoinMarketCap data, claimed 23.4% of weekly inflows at $15.5 million.
A detailed scrutiny of Solana-based product performance reveals that Solana realized $43 million in inflows. The impressive performance in October accounts for over half of the year-to-date aggregate of $74 million. The surge positions Solana as the preferred crypto for institutional offerings after Bitcoin.
Investors Divorcing Ethereum-Traded Products
CoinShares’ report indicates that Ethereum’s activity showed exclusivity as the only altcoin that suffered weekly outflows of $7.4 million. The performance closely matched the $7.5 million outflows reported in the previous week.
The dismal performance of Ethereum arises from the continued concerns harbored by investors.
CoinShares’ Luke Logan, who serves as the Ethereum research associate, expressed concerns regarding the Lido’s dominance in staking. Also, investors are ditching Ethereum from the increasing validator size. The additional hardware requirements to run nodes would coincide with decreased entity returns.
CoinShares finding that Ethereum sustained the outflows echoes the previous stance by Butterfill to label the second-ranked crypto by market capitalization as least loved. The investors of exchange-traded products (ETP) are continually ditching Ethereum, with its outflows hitting $119 million in 2023.
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