Crypto Investment Products Record $243 Million Inflows in Final Week of 2023, Yearly Total Reaches $2.2 Billion – CoinShares

Crypto Investment Products Report
Source: Adobe / Luisa

Cryptocurrency investment products witnessed substantial inflows, totaling $243 million in the final week of 2023, contributing to a cumulative yearly inflow of $2.2 billion.

According to CoinShares, Bitcoin (BTC) led the way with over $1.9 billion in inflows, accounting for 86% of the total. Solana (SOL) followed as the second-highest, with $167 million in inflows.

The final week of 2023 saw US$243m of inflows into digital asset ETPs, bringing 2023 total flows to US$2.2bn.

— James Butterfill (@jbutterfill) January 3, 2024

However, multi-asset and Binance Coin (BNB) exchange-traded products (ETP) experienced net outflows of $18 million and $1 million, respectively.

When compared to the previous year, crypto investment products in 2023 saw higher inflows than in 2022. In 2022, Bitcoin funds attracted $388 million, making up 47.5% of the $816 million total. Multi-assets followed with $272 million, while Binance Coin experienced an outflow of $24 million.

The trend in crypto investment products shifted positively during the week of September 29, marking the beginning of the current bull market. Prior to that, these products faced outflows in eight of the previous nine weeks.

Exchange-traded products (ETPs) showed an interesting trend, with multi-asset and Binance Coin (BNB) ETPs registering net outflows of $18 million and $1 million, respectively. The data reflects investors’ diverse preferences within the cryptocurrency market.

Bitcoin Reaches $45,000, Highest Level Since April 2022

Bitcoin’s upward trajectory continued into the new year, reaching $45,000 on January 2, marking its highest point since April 2022. The surge in Bitcoin’s price has been fueled by persistent anticipation for the approval of spot Bitcoin exchange-traded funds (ETFs), a development that has been widely anticipated for several months.

The market’s interest in cryptocurrency investment products aligns with the broader expectation of the approval of a spot Bitcoin ETF in the United States. Bitcoin’s price surpassed $45,000 as the crypto community awaits potential approval from the U.S. Securities and Exchange Commission (SEC) for one or more of the 14 pending applications for a spot Bitcoin ETF.

The last time Bitcoin traded above $45,000 was nearly 20 months ago, on April 5, 2022. Following that period, Bitcoin entered a prolonged bear market, reaching as low as $15,600.

However, recent market volatility has been evident, with over $460 million in longs liquidated across the crypto market after Bitcoin’s price dropped by 8% on rumors of a potential SEC delay in approving spot ETFs. Long traders suffered approximately $462 million in losses across major centralized exchanges over the past few hours.

Notably, the liquidations come amid reports that the SEC might reject spot Bitcoin ETF applications. The rumor led to significant market movements, with Bitcoin’s price dropping to as low as $40,000. Crypto exchanges OKX, Binance, and Huobi witnessed the highest share of liquidations.

Notably, Multi-Asset and Binance exchange-traded products (ETP) bucked the trend, experiencing net outflows of $18 million and $1 million, respectively. When comparing the year-to-year data, 2023 surpassed 2022 in terms of higher inflows into digital asset investment products.

While analysts on the X platform suggest that Bitcoin may not experience a significant rally on the day of an ETF approval due to decreasing implied volatility, some traders remain optimistic. Scott Melkor, with a large following on X, predicts that Bitcoin, currently forming a “bull pennant,” could rise as high as $54,000 in the days following a potential SEC approval.

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