Industry Updates

Investors pile into bitcoin ETPs on positive SEC sentiment

BTCE saw $165m of inflows last week

Theo Andrew

a close-up of a pile of coins

Investors poured $225m into bitcoin exchange-traded products (ETP) last week as the Securities and Exchange Commission (SEC) edged closer to approving the first bitcoin ETF.

Bitcoin accounted for almost all of the $226m net inflows for crypto ETPs in the week ending 8 October, taking total inflows to $638m over the past eight weeks, according to data from crypto ETP provider CoinShares.

Crypto issuer ETC Group accounted for most of the inflows, raking in $165m through its BTCetc Bitcoin Exchange Traded Cryptocurrency ETC (BTCE) taking its assets under management (AUM) to $1.4bn.

CoinShares Physical took in the next highest inflows with $54.7m, followed by 21Shares ($10.8m), Purpose ($6.3m) and CoinSharesXBT ($6.2m).

The price of bitcoin has risen by 35% over the past two weeks – breaking through the $50,000 barrier – after the US regulator gave the green light to the US’s first bitcoin equities ETF, the Volt Bitcoin Revolution ETF, which tracks a basket of 30 equities linked to the crypto industry.

The approval came after SEC chair Gary Gensler said crypto assets can be viewed as a “store of value”.

Bitcoin future ETFs could launch as soon as 18 October if the SEC chooses not to delay the process with more than a dozen firms currently waiting to hear if their applications will be approved.

James Butterfill, investment strategist at CoinShares, said: “We believe the turnaround in sentiment towards bitcoin is due to constructive statements from Gensler, potentially allowing a bitcoin ETF in the US.”

He added flows have been aided by increased institutional participation in the asset class.

Research by the ETP provider found average portfolio weightings in digital assets represent 1.1% of AUM, although varying considerably across different institutional investor types.

Of those surveyed, 21% said regulation was cited as the main reason for not investing in crypto.

Elsewhere, ethereum recorded $14m outflows last week as it continues to lose market share to bitcoin. Cardano and solana continued to see inflows, gathering $12.5m and $3m, respectively.

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