Bitcoin and Ethereum investors have poured over $1.07 billion into digital asset investment products so far this year, according to James Butterfill, CoinShares Head of Research. This represents a significant increase from the $847 million in annual inflows reported earlier. The data covers allocations to products such as Grayscale’s Bitcoin Trust (CBTC) and Bitwise’s 10 Crypto Index Fund (BITW). Butterfill noted that this year has seen a high level of interest and demand, the likes of which haven’t been seen since 2021.
Last year, the industry faced a steep drop in digital asset prices, with Bitcoin falling as low as $15,649. However, Butterfill believes that the recent surge in inflows indicates a change in investor sentiment, particularly among institutions. He noted that large inflows are typically a sign of institutional buying, although it is difficult to determine the exact source of the inflows due to the anonymous nature of allocations.
Analysts attribute Bitcoin’s recent rally to anticipation for a spot Bitcoin ETF on Wall Street. CoinShares data shows that products associated with Bitcoin have seen $1.03 billion in inflows, accounting for 96% of allocations this year. Butterfill stated that there is now less stigma associated with investing in digital assets, with major asset managers like Franklin Templeton and BlackRock increasingly entering the crypto space.
In related news, filings with the Securities and Exchange Commission and NASDAQ suggest that BlackRock is laying the groundwork for an Ethereum-based ETF. Ethereum has seen a 16% increase over the past week, reaching around $2,100. Additionally, Ethereum has become deflationary again as activity associated with altcoins on the network has risen. Annual outflows associated with Ethereum have decreased by $30 million since CoinShares’ report on Monday.
Butterfill commented that investors will soon realize that Ethereum is the only asset that is deflationary and offers a yield. He described Ethereum as more akin to a high-yield tech stock, distinguishing it from Bitcoin.
The article was edited by Stacy Elliott and Andrew Hayward.
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