Inflows of US Digital Asset ETFs Hits Total of $7.7B in Four Weeks

Image by Jimmy Aki, Midjourney

Digital asset management funds are still on a record rise. So far, the crypto-backed investment products have recorded $7.7 billion in total inflows in the US, according to a February 6 CoinShares report on crypto-backed investment funds.

CoinShares Head of Research James Butterfill shared his insights, noting that the world’s largest cryptocurrency, Bitcoin, saw the most fund inflows in crypto-backed investment products.

Bitcoin Inflows Hit $703 Million in Past Week

According to Butterfill, Bitcoin had a combined total of $703 million last week. This accounted for 99% of all total inflows recorded in the said period. Also, short-Bitcoin fund movements recorded a total outflow worth $5.3 million, a direct indicator of the reversal of the digital asset’s negative price momentum.

The report hasn’t stopped on Bitcoin’s sole inflows since February began. According to the report, total inflows came up to $7.7 billion locked in since the January 11 launch of the spot Bitcoin ETFs.

The total outflows have also been sizable at $6 billion, leaving about $1.6 billion in total year-to-date inflows locked. The total global amount of assets under management (AUM) was put at an incredible $53 billion.

More insights detailed that $708 million in inflows was recorded while the trading volumes for exchange-traded products (ETPs) fell to $8.2 billion. This figure is historic, given that the previous week’s total for ETP trades stood at $10.6 billion.

It is still above the $1.5 billion week average recorded for ETP total trades in 2023, however.

🟢 Digital asset investment products saw large inflows totalling US$708m last week!

📈 This brings year-to-date inflows to US$1.6bn and total global assets under management to US$53bn.

📉 Trading volumes in ETPs fell to US$8.2bn (compared to US$10.6bn the prior week), but… pic.twitter.com/phsy5zjnTf

— CoinShares (@CoinSharesCo) February 5, 2024

The sizable inflows are further helped by the reduced outflows on Grayscale Bitcoin Trust ETF(GBTC). According to Butterfill, GBTC’s outflows stood at $926.7 million in the past week.

Other outflows in the US show that ProShares ETFs saw $108.9 million in digital funds moved from its platform.

European outflows were also captured, with Sweden’s XBT Provider AB recording $8.2 million in outflows and Germany’s ETC Issuance GmbH losing $8.6 million. Purpose Investments Inc ETF rounded up the list with $36.5 million in recorded outflows.

Solana Continues to Turn Heads

Bitcoin may be the most coveted digital asset, but some altcoins have also impressed investors.

Solana attracted $13 million in inflows in the past week. Ethereum and Avalanche investment products followed closely, which recorded $6.4 million and $1.3 million in inflows, respectively.

On the other end of the spectrum, blockchain-backed equities were able to attract $11 million in inflows, although they lost $147 million in outflows.

The likely reason for such a high volume of outflows in Europe and elsewhere lies in the affordable charges most spot Bitcoin ETFs offer interested investors, especially in the US.

While traditional crypto fund managers like Grayscale charge as much as 1.5% in management fees, new-generation services charge between 0.2% and 0.5%.

The high fee has been the defining factor in digital fund movements to the US in the last four weeks.

CoinShares noted in its report that the US-based spot Bitcoin ETFs attracted $721 million in inflows last week, with newly issued ETFs recording $1.7 billion in inflows.

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