ETP
Inflows into Bitcoin investment products reach $1.5B year-to-date
Inflows into digital asset products rose for a ninth consecutive week, according to CoinShares.
Bitcoin (BTC) exchange-traded products (ETPs) registered $312 million in inflows for the week of Nov. 24, bringing year-to-date inflows to around $1.5 billion, according to CoinShares. The weekly inflows for all cryptocurrencies totaled $346 million, continuing a nine-week trend of positive net flows.
New record of inflows with US$346m this week, the highest total observed in the past 9 weeks of inflows.
— CoinShares (@CoinSharesCo) November 27, 2023
– #Bitcoin –
$BTC: US$312m inflows (year-to-date inflows US$1.5bn)
Short Bitcoin: US$0.9m outflows
ETP volumes as a percentage of total spot Bitcoin volumes… pic.twitter.com/gMUPzTy0q4
Crypto ETPs experience inflows when their shares trade above the prices of their underlying assets, whereas they experience outflows when their shares trade below the value of their underlying assets. For this reason, inflows are often seen as a bullish indicator for the overall crypto market, whereas outflows are often seen as bearish.
Before Sept. 25, crypto ETPs had experienced outflows for several weeks, according to the report. But beginning in the week of Sept. 25–29, the sector began experiencing sustained weekly inflows. The amount of inflows also increased over time. The week ending on Nov. 24 saw the largest inflows of the entire nine-week period.
CoinShares stated that Canadian and German ETPs made up the largest portion of inflows for the week, at 87%. United States inflows were subdued at $30 million.
Crypto funds as a whole now have $45.4 billion in assets under management, the highest in 18 months.
In a previous report, CoinShares speculated that these recent inflows may be influenced by growing optimism that a U.S. spot Bitcoin ETF will be approved. On Nov. 22, BlackRock met with the U.S. Securities and Exchange Commission in an attempt to make progress toward this goal. Grayscale met with the SEC for similar reasons.
Grayscale asks SEC to meet on ‘way forward’ for Bitcoin ETF conversion
“We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible,” Grayscale's lawyers wrote to the regulator.
Grayscale has told the Securities and Exchange Commission it has no legal reasoning left to block the conversion of the asset manager’s flagship Bitcoin (BTC) fund to a spot exchange-traded fund (ETF).
On Sept. 5, Grayscale’s lawyers sent a letter to the SEC requesting the pair meet to discuss the next steps following the regulator’s court loss regarding the conversion of the Grayscale Bitcoin Trust (GBTC).
“Now that the Court of Appeals has spoken, there is no available rationale that would distinguish a Bitcoin futures ETP from a spot Bitcoin ETP under the legal analysis previously adopted by the Commission in rejecting spot Bitcoin ETPs.”
Grayscale added it believes the SEC should conclude there are "no grounds" for treating the GBTC differently from Bitcoin futures ETFs whose filings "the Commission has previously approved."
On Aug. 29, a United States Appeals Court ruled against the SEC’s denial of Grayscale’s application to convert its GBTC to a spot Bitcoin ETF.
Grayscale said if there was any other reason for rejecting the conversion besides the Exchange Act’s requirement that rules be “designed to prevent fraudulent and manipulative acts and practices,” it would have already been made apparent.
“We are confident that it would have surfaced by now in one of the fifteen Commission orders that rejected spot Bitcoin filings even after Bitcoin futures ETPs began trading,” Grayscale wrote.
Grayscale added its fund conversion application has been pending for nearly three times longer than the length of time stipulated by the SEC’s rules.
Joseph A. Hall — who also penned Grayscale’s letter in July urging the SEC to approve all pending ETF applications together — concluded his latest letter by saying:
“We believe the Trust’s nearly one million investors deserve this fair playing field as quickly as possible.”
Related: Grayscale wins the court battle, but what does this mean for a spot Bitcoin ETF?
Since the Aug. 29 court ruling the GBTC discount — the percentage showing how far off an ETF is trading above or below its net asset value — has fallen to 19.9%.
GBTC’s discount was nearing negative 50% during the bear cycle bottom following the FTX collapse in December 2022.
Magazine: How to protect your crypto in a volatile market — Bitcoin OGs and experts weigh in
Bitcoin ETFs to push US slice of crypto ETF trading volume to 99.5% — Analyst
Approval of spot Bitcoin ETFs in the United States will likely push the country's share of crypto ETF trading volumes even higher, says a Bloomberg analyst.
The United States could make up for 99.5% of the global trading volume for crypto-related exchange-traded funds (ETF) — but only if spot Bitcoin ETFs are approved, according to a Bloomberg ETF analyst.
Currently, North America accounts for 97.7% of all crypto ETF trading volume, Bloomberg senior ETF analyst Eric Balchunas revealed in an Aug. 10 X (Twitter) post.
“If/when spot ETFs come out in the U.S. this will likely go to like 99.5%,” he speculated.
There is currently a long list of spot Bitcoin ETF applications awaiting approval from the Securities and Exchange Commission. The regulator is scheduled to give its decision on Ark Invest’s and 21Share’s joint ARKB fund by Aug. 13, though a delay has been widely expected.
During a Bloomberg interview on Aug. 7, Ark CEO Cathie Wood speculated the regulator could be waiting to approve multiple funds at the same time.
On Aug. 10 Bitwise filed an updated prospectus to change its BITC fund from a Bitcoin futures ETF to the "Bitwise Bitcoin and Ether Equal Weight Strategy ETF". The move mirrors one by Valkyrie on Aug. 5 changing its BTC Futures ETF (BTF) to include Ethereum Futures.
“Cannonball Run in effect,” commented Balchunas on Aug. 11.
Crypto-related ETFs top performance charts
Meanwhile, Balchunas also noted that the top 15 exchange-traded funds in terms of performance all have exposure to crypto and blockchain.
“Every single one of the Top 15 best-performing equity ETFs this year is crypto-related.”
The Valkyrie Bitcoin Miners ETF was the top performer with a return of 227% since the beginning of 2023. WGMI is an actively managed fund available through Nasdaq that invests in public companies in the Bitcoin mining industry such as Marathon Digital, Riot, and Cipher Mining.
Many of the top-listed mining firms have seen their stocks outperform Bitcoin this year which could explain the stellar performance of products such as WGMI.
Related: ETF analyst raises spot Bitcoin ETF approval chances in the US to 65%
The VanEck digital transformation ETF was second on the list with a return of 182% so far this year. The DAPP fund also tracks a number of crypto mining and technology firms. These include Coinbase, MicroStrategy, Galaxy Digital, Canaan, and Hive.
Every single one of the Top 15 best performing equity ETFs this year is crypto-related. $WGMI leading way w +227%. Finally attracting flows too, altho pretty modest considering these perf numbers. This is part of our monthly Crypto ETF Report via @JSeyff & @SirYappityyapp pic.twitter.com/iPIHhH82Jr
— Eric Balchunas (@EricBalchunas) August 10, 2023
Other leading crypto-related ETPs included the Global X Blockchain ETF (BKCH) with 168% YTD, Bitwise Crypto Industry Innovators ETF (BITQ) also returning 168%, and Invesco’s Alerian Galaxy Crypto Economy ETF (SATO) with 162% so far in 2023.
Asia Express: China’s risky Bitcoin court decision, is Huobi in trouble or not?
$27 trillion AUM is perched over Bitcoin and crypto: CoinShares CSO
The top eight financial institutions with an interest in Bitcoin and crypto have a whopping $27 trillion in combined assets under management.
There is at least $27 trillion of assets managed by major U.S. financial institutions that are also “actively” seeking to provide clients with exposure to Bitcoin (BTC) and crypto.
On June 26, CoinShares chief strategy officer Meltem Demirors highlighted at least eight major financial institutions that have signaled moves in the digital assets space, including BlackRock’s spot Bitcoin ETF filing and Fidelity’s crypto wealth management solutions.
Others include JP Morgan, Morgan Stanley, Goldman Sachs, BNY Mellon, Invesco and Bank of America.
“Many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more,” she noted, adding that there is a whopping $27 trillion in assets under management between them.
1/ last week's @BlackRock spot Bitcoin ETF filing was big news!
— Meltem Demirors (@Melt_Dem) June 26, 2023
but, it's not the only story. many of the largest financial institutions in the US are actively working to provide access to Bitcoin and more.
a quick glance - $27 trillion of client assets here! pic.twitter.com/azmHZmUL2a
Earlier this month, BlackRock’s June 16 spot Bitcoin exchange-traded fund application led to a wave of filings for similar products, boosting a narrative that suggests “institutions are coming” for Bitcoin.
BTC price reached a 2023-high of $31,185 on June 24 amid surging confidence, according to CoinGecko.
Demirors however noted that while "the institutions are coming,” it’s still more of a trickle than a wave. "We're seeing the bridges being built in real-time," she added.
It should be noted that the $27 trillion figure is an estimation of the total assets under management across the eight institutions and only a tiny portion of this would likely be allocated to crypto investments.
Nevertheless, Reflexivity Research co-founder, Will Clemente, still echoed Demiror’s sentiment, pointing out that Bitcoin’s market capitalization is less than $600 billion.
“Between HSBC, Blackrock, Fidelity, and Schwab we are talking about $25 trillion in assets under management that will soon be enabled to buy Bitcoin.”
Institutional investors are already showing more interest in Bitcoin-related funds. The ProShares Bitcoin Strategy ETF (BITO) saw its largest weekly inflow for a year pushing AUM over $1 billion, as reported by Cointelegraph.
Related: BlackRock’s Bitcoin ETF ‘is the best thing to happen’ to BTC, or is it?
Earlier this week, Federal Reserve Board of Governors member Michelle Bowman criticized the absence of a crypto regulatory framework claiming that the uncertainty over the asset class traps institutions in a “supervisory void.”
Magazine: Crypto regulation: Does SEC Chair Gary Gensler have the final say?
Bitcoin ETF fever returns: ‘Biggest’ inflow to ProShares’ BITO in a year
ProShares’ BITO Bitcoin ETF saw a weekly inflow of $65 million as institutional investors have seemingly regained their mojo for Bitcoin futures.
Bitcoin (BTC) exchange-traded fund (ETF) fervor is back with a raft of new applications and an increase in capital inflows from institutional investors.
On June 26, a surge of inflows to the ProShares Bitcoin Strategy ETF (BITO) — a Bitcoin futures fund — was observed by Bloomberg senior ETF analyst Eric Balchunas.
The fund had its largest weekly inflow in a year at $65.3 million with its assets topping $1 billion.
BITO was the first BTC-linked ETF in the United States and is one of the most popular among institutional investors.
Balchunas claimed BITO “pretty much has tracked Bitcoin perfectly,” lagging spot prices by 1.05% annually and has a fee of 0.95%.
The Bitcoin Futures ETF $BITO had its biggest weekly inflow in a year as assets top $1b again. It also traded half a billion in shares on Friday, which it's only done about 5 times before via @SirYappityyapp pic.twitter.com/Xrq0lUaaTO
— Eric Balchunas (@EricBalchunas) June 25, 2023
The BITO fund has made a 59.6% gain since the start of 2023 according to ProShares. There’s been an uptick in Bitcoin derivatives interest across the board since BlackRock filed for its own Bitcoin ETF on June 15.
According to the Deribit crypto options exchange, Bitcoin futures open interest (OI) has surged since last week. It is currently $319 million as of June 25, up around 30% from the same period last week.
OI is a measure of the total number of outstanding futures contracts that have not been settled.
The resurgence in ETF trading and the resultant BTC price pump has also been good news for the world’s largest crypto asset manager, Grayscale. The Grayscale Bitcoin Trust (GBTC), which has been trading at a massive discount to spot BTC prices for months, is heading in the right direction as that gap diminishes.
According to Coinglass, the Grayscale premium, also known as its discount, is -31.2%. It fell as low as -49% in December.
Related: Volatility Shares Trust aims for listing of leveraged Bitcoin futures ETF
It remains unclear if the Securities and Exchange Commission (SEC) will approve a spot Bitcoin ETF, but the race is now on as a new wave of filings has followed BlackRock’s.
WisdomTree, for the third time, filed with the SEC to create a spot Bitcoin ETF, just hours later Invesco renewed its application for a similar product.
On June 25, ETF Store President Nate Geraci tweeted his list of ETF issuers that he “would keep an eye on” as he believes they will file or refile for a spot Bitcoin ETF based on past filings. Geraci named First Trust, VanEck, Global X, Fidelity, and what he called the “dark horse,” Schwab.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom
U.S. SEC Once Again Rejects ARK Invest’s Proposal for a Spot Bitcoin (BTC) ETF
The U.S. Securities and Exchange Commission (SEC) has turned down another attempt to launch a spot Bitcoin (BTC) exchange-traded fund proposed by Cathie Wood’s ARK Invest and global crypto ETF provider 21Shares. In a newly issued order, the SEC is rejecting a proposal that would allow the ARK 21Shares Bitcoin ETF to be listed on […]
The post U.S. SEC Once Again Rejects ARK Invest’s Proposal for a Spot Bitcoin (BTC) ETF appeared first on The Daily Hodl.
Osprey Vies for Control of Grayscale’s Bitcoin Trust; Tron’s Justin Sun Offers to Invest Up to $1B on DCG Assets
Following charges by the U.S. Securities and Exchange Commission against the crypto exchange Gemini and the digital currency lender Genesis, Tron founder Justin Sun told the press that he may be able to purchase assets from Genesis, up to $1 billion, “depending on their evaluation of the situation.” Additionally, the crypto investment manager Osprey has […]Rivals steadfast even as two Aussie crypto ETF providers bail
The last week has seen two digital asset ETF providers announce their planned exit from the market amid regulator scrutiny and the prolonged crypto winter.
Two digital asset exchange-traded fund (ETF) issuers in Australia are set to leave the market amid heightened regulator scrutiny and a deepened crypto winter, though some remain bullish about the market's prospects.
In the last week, Australian crypto ETF providers including Holon Investments and Cosmos Asset Management have indicated they may be stepping back from the crypto ETF scene.
On Nov. 6, Holon said it might close its three retail crypto funds following a hardline stance from the Australian financial regulator which has accused the fund of failing to "describe the risks to investors in its target market determination filings," according to a report from the Australian Financial Review (AFR).
It comes after the Australian Securities and Investments Commission (ASIC) issued an interim stop order on Oct. 17 directed at Holon's three funds due to non-compliant target market determinations (TMDs).
The AFR report notes that Holon has argued that the crypto funds were designed to be part of a diversified portfolio, not the majority of an investment strategy, though it may have fallen on deaf ears.
Another crypto ETF issuer Cosmos is also jumping ship with last week’s announcement that it would de-list its crypto ETFs from the Cboe Australia exchange.
According to the report, sources stated that Cosmos failed to attract sufficient assets under management to remain viable. It also had heavy overheads in crypto custody and professional indemnity insurance costs.
According to public disclosures in September, Cosmos had around $1.6 million in AUM for its combined BTC and ETH funds.
Related: Three crypto ETFs to be delisted in Australia as crypto winter continues
However, some crypto ETF providers appear to remain committed to the market, which is expected to see one million new crypto adopters over the next 12 months, according to a recent survey from crypto exchange Swyftx.
Providers currently involved in the Australian crypto ETF market include 3iQ Digital Asset Management, Monochrome Asset Management, and Global X Australia, formerly known as ETF Securities.
Global X Australia chief executive Evan Metcalf told the AFR that the firm continues to have a “strong conviction in digital assets and has no plans to close any crypto ETPs," noting:
“We are very bullish on the crypto markets in general, digital assets, and decentralized finance – we see enormous potential there.”
Metcalf did however note that the funds had experienced a "relatively quiet" reception from investors amid the current market downturn, while there was an "unwillingness" from local stockbrokers to provide clients access to its funds.
Over 200K BTC now stored in Bitcoin ETFs and other institutional products
Bitcoin ETPs now have more BTC under control on behalf of clients than ever before.
Bitcoin (BTC) investment vehicles are seeing “gargantuan” inflows this month in a fresh sign that traders’ appetite for BTC exposure is mounting.
Data from monitoring firm Arcane Research published this week shows that Bitcoin exchange-traded products (ETPs) now have record high BTC under management.
"Happier days" for Bitcoin ETPs as buyers pile in
Despite BTC price action failing to draw in buyers at over 50% below all-time highs, not everyone is feeling risk-off.
According to Arcane’s data, Bitcoin ETPs have seen a flurry of interest from institutional investors both this month and last.
In total, Bitcoin ETPs, which include products such as the ProShares Bitcoin Strategy exchange-traded fund (ETF), now have 205,000 BTC under their control — a new record.
“While the May recovery was strong in ETPs, June has seen even happier days!” Arcane analyst Vetle Lunde told Twitter followers while uploading the numbers on June 2.
“The first two days of June have seen gargantuan net inflows to Purpose, 3iQ Coinshares, and BITO, pushing the global BUM to a new all-time high of 205,008 BTC.”
In the first few days of June alone, more than 7,000 BTC flowed to ETPs, almost as much as for the entirety of May, which itself saw an impressive 9,765 BTC rise.
“Massive $BTC inflows into Bitcoin ETFs in June already,” Zhu Su, cofounder of asset manager Three Arrows Capital, reacted.
Little reprieve for GBTC
The Purpose Bitcoin ETF, the first Bitcoin spot price ETF to launch anywhere in the world, meanwhile had $1.294 billion worth of assets under management as of June 3, data from on-chain monitoring resource Coinglass confirmed.
Related: Bitcoin bounces to $30.7K as analyst presents Stock-to-Flow BTC price model rehash
Things remained somewhat less rosy for industry stalwart the Grayscale Bitcoin Trust (GBTC), however.
According to Coinglass data, GBTC continues to trade near a record discount to the Bitcoin spot price, currently 28.68% as of June 3.
Previously, Cointelegraph reported on Grayscale’s ongoing battle to convert GBTC to a Bitcoin spot ETF.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.