Bitcoin Sees Lion’s Share of Investment Amid Spot ETF Hype: CoinShares

Investments into institutional crypto products were positive for the fourth consecutive week, according to a new report by CoinShares.

Products analyzed in these reports aren’t direct crypto holdings, but rather exchange-traded products that track cryptocurrencies offered by Grayscale, 21shares, and Proshares, among others.

Last week, the total investment amounted to $66 million, with the lion’s share of 83.7%, or $55.3 million, directed toward Bitcoin.

Swiss-based firm 21SharesAG saw the largest inflows of $45.5 million. German digital securities provider, ETC Group, was second with inflows of $12.2 million.

Notably, the U.S.-based ProShares Bitcoin Strategy ETF saw outflows of 10.7 million, taking its net monthly total to 20.1 million in outflows. In 2023, the futures-based Bitcoin product took the lead in terms of total inflows, with a significant $238 million invested.

James Butterfill, the head of research at CoinShares, wrote that the positive inflows are “likely linked to excitement over a spot bitcoin ETF launch in the U.S.”

Spot Bitcoin ETF top of mind

When comparing the latest four-week investments to investments observed in June, following BlackRock’s spot Bitcoin application announcement, the most recent investments have been “relatively low.”

In June, investments amounted to approximately $807 million, whereas the last four weeks saw just $179 million in inflows.

Butterfill said that the lower inflows are “indicative of investors adopting a more cautious approach this time.”

Over the past two weeks, a few Bitcoin ETF applicants in the U.S., including BlackRock, Fidelity, and Ark Invest, made amendments to their filings, which some experts interpreted as a positive development.

Grayscale also filed a new registration application on October 19 to convert its Bitcoin Trust Shares (GBTC) to an ETF.

This move came shortly after the asset management firm won a court case against the Securities and Exchange Commission (SEC) regarding the Commission’s earlier rejection.

Solana continues to lead altcoin inflows

Among altcoins, and after Bitcoin, Solana continued to be the favorable investment choice for investors, accounting for 23.4% of the total weekly inflows at $15.5 million.

In the past month, Solana-based products attracted inflows of $43 million, contributing to a year-to-date total of $74 million. This makes Solana the preferred cryptocurrency in institutional offerings after Bitcoin.

Notably, Ethereum was the only altcoin to witness outflows of $7.4 million, adding to the previous week’s outflows of $7.5 million.

Butterfill attributed this to “continued concerns over Ethereum.”

Luke Logan, the Ethereum research associate at CoinShares, raised centralization concerns over Lido’s dominance in liquid staking and, also, over increasing Ethereum’s validator size in a report recently.

The increasing number of Ethereum validators threatens to increase the hardware requirements for running nodes and also decrease the returns of individual entities.

Previously, Butterfill labeled Ethereum as the “least loved digital asset” for exchange-traded product (ETP) investors. Ethereum-based products have seen outflows totaling $119 million this year.

Edited by Liam Kelly.