Last week, a big increase in money going into crypto Exchange-Traded Products (ETPs) happened.
CoinShares, an asset management firm, reported $326 million in new investments. This beat the prior week’s $66 million.
Many think this rise is due to growing investor confidence. They expect the U.S. SEC, a government agency, to soon okay a Bitcoin ETF.
ETPs act like baskets of assets, such as Bitcoin or Ether. They are popular because people can keep them in regular investment accounts.
In finance, “inflows” and “outflows” are key terms. Inflows happen when a fund’s price rises faster than the asset it holds, making the fund buy more.
This is usually a good sign. Outflows happen when a fund sells the asset because its own price falls. This is often a bad sign.
CoinShares said last week’s inflows were at a 15-month high. This also marked five straight weeks of more money coming in than going out.
Many believe the possible SEC approval of a Bitcoin ETF fuels this trend. If approved, we can expect even more money to pour in.
However, last week’s surge was not record-breaking. It was the 21st-highest week for new money, CoinShares noted.
Most new money, 90%, went into Bitcoin ETPs. Solana also did well with $24 million in new money. Ether funds, however, lost $6 million.
Background
Crypto ETPs have been around for a few years, but they’ve gained more attention recently.
Before ETPs, investors had to buy and store cryptocurrencies themselves, which can be complicated.
ETPs offer a simpler way to invest in crypto, just like investing in stocks. They’ve opened the door for more traditional investors to enter the crypto market.
This trend isn’t isolated to the U.S. Other countries have also started approving crypto ETPs, broadening the investment landscape.
Regulatory approval, like from the SEC, adds more legitimacy to these products. This can attract even more investors and money into the crypto space.
All in all, the rise in ETP inflows may indicate a broader acceptance and integration of cryptocurrencies in traditional finance.