United States-based spot Bitcoin investment products have marked a new milestone, witnessing a record weekly inflow of $2.9 billion in new assets. This achievement underscores the growing investor interest and confidence in Bitcoin as a viable asset class. According to a report released on March 18 by CoinShares, a leading digital asset investment firm, the year-to-date inflow into Bitcoin-centric investment vehicles such as spot exchange-traded funds (ETFs) has reached a staggering $13.2 billion. This surge has elevated the total value of Bitcoin under custody to $74.61 billion, with Bitcoin products constituting 97% of the total inflows for the period.
James Butterfill, a CoinShares analyst, highlighted the unprecedented nature of these inflows, noting that the latest figures surpass the previous all-time weekly high of $2.7 billion. This development reflects a robust and unwavering interest in Bitcoin investments, despite the broader market’s fluctuations. Interestingly, investment products centered on Ether and other altcoins have not mirrored this trend, attracting only a minor fraction of the capital inflow compared to Bitcoin.
Despite this influx of investment, the price of Bitcoin has experienced a 7% decline over the past week, trading at $67,418 at the time of reporting. This price movement suggests a complex interplay between market dynamics and investor sentiment, not always directly correlated with investment inflows.
In contrast to the booming interest in the U.S., Bitcoin exchange-traded products (ETPs) in other markets such as Germany, Canada, and Sweden have seen significant outflows. Investors have withdrawn $738 million from these products, with many opting for U.S.-based counterparts instead. This shift is attributed to the competitive management fees offered by U.S. Bitcoin ETFs, which can be as low as 0% for certain inflows, compared to the higher fees charged by international ETPs. Since their approval by the Securities and Exchange Commission (SEC) in January, U.S. Bitcoin ETFs have rapidly dominated over 80% of the spot Bitcoin ETF market share.
The rising popularity of Bitcoin ETFs has also influenced regulatory bodies globally. The Financial Conduct Authority (FCA) in the United Kingdom and the Securities and Futures Commission (SFC) in Hong Kong have shown a more accommodating stance towards these products. Notably, the FCA has expressed openness to the creation of a U.K. listed market segment for cryptoasset-backed Exchange Traded Notes, and Hong Kong’s SFC received its first spot Bitcoin ETF application earlier this year, signaling a broader acceptance and integration of cryptocurrency into the financial mainstream.
