|Get all the essential market news and expert opinions in one place with our daily newsletter. Receive a comprehensive recap of the day's top stories directly to your inbox. Sign up here!|
(Kitco News) - Institutional investors joined retail investors in reengaging with the crypto market last week after Bitcoin (BTC) hit its highest price in 2023, with the latest digital asset fund flows report from CoinShares showing that digital asset investment products saw inflows of $326 million during the week ending Oct. 27.
The surge in interest is primarily attributed to the rising optimism from investors that the U.S. Securities and Exchange Commission is likely to approve a spot Bitcoin exchange-traded fund (ETF) in the near future, according to CoinShares’ head of research James Butterfill.
The $326 million was the largest single week of inflows since July 2022 and increased the month-to-date inflows to nearly half a billion dollars.
Digital asset fund flows. Source: CoinShares
“While positive for Bitcoin, this weekly inflow ranks as only the 21st largest on record, suggesting continued restraint amongst investors, although we do believe a spot-based ETF is now highly likely in the coming months, and will represent a step-change for the industry from a regulatory perspective,” Butterfill said.
Despite the U.S. serving as the source of momentum due to ETF speculation, the region only accounted for 12% of the inflows last week, with U.S.-based investors increasing their allocations by $38 million.
Fund flows by region. Source: CoinShares
Canada accounted for the largest portion with $134 million, while Germany accounted for $82 million, and Switzerland saw inflows of $50 million. Asia saw inflows of $28 million, the largest weekly inflows for the region over the past year, Butterfill said.
Bitcoin received the lion’s share of investments with $296 million flowing into the various BTC-related products, representing 90% of last week’s total inflows. Short-Bitcoin products saw inflows of $15 million.
Fund flows by asset. Source: CoinShares
Solana (SOL) continues to see increasing interest from the institutional crowd with nearly $24 million in inflows, while Ether (ETH) extended its streak of outflows as $6 million exited these products during the week. To date, Ether products have seen outflows totaling $125 million for the year while Solana has seen inflows of $98 million.
Total assets under management now stand at $37.8 billion, the highest since May 2022, Butterfill said.
And in another sign of the changing times, data provided by Coinglass shows that the Chicago Mercantile Exchange (CME), a regulated derivatives exchange that lists Bitcoin futures, now ranks second behind Binance in terms of notional open interest on the list of BTC futures exchanges.
Bitcoin Futures Exchange rankings by open interest. Source: Coinglass
As shown in the chart above, the CME’s open interest hit $3.58 billion on Monday, increasing the CME’s standing by two positions since last week. The regulated derivatives exchange platform now ranks higher than ByBit and OKX and is just $31 million below Binance, the top-ranked cryptocurrency exchange in the world by volume.
The increase in open interest on CME pushed its cash-settled futures contract above 100,000 BTC in volume, and the exchange now represents 25% of the Bitcoin futures market share. A large portion of the inflows into CME futures came via standard futures contracts, indicating an increase in institutional interest that coincided with Bitcoin’s double-digit increase in October, which saw it hit a one-year high of $35,155.
Data provided by Alternative shows that the Crypto Fear & Greed Index is now in ‘Greed’ territory after being in neutral territory for the last month.
Crypto Fear & Greed Index. Source: Alternative
Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.