NFTs

Institutional ETPs Post First Inflow In Five Weeks Despite Bitcoin Price Pullback

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Weekly ETP trade volume is down 53% compared to April.

After four straight weeks of outflows, investors tentatively resumed putting money into cryptocurrency exchange-traded products (ETPs).

According to CoinShares’ May 13 Digital Asset Fund Flows report, institutional digital asset investment products enjoyed an inflow of $130 million last week, averting a five-week dry spell.

The move coincided with the Grayscale Bitcoin Trust (BTC) posting its lowest outflow since converting into an exchange-traded fund (ETF) in January at 171 million. GBTC hosted no inflow or outflow on May 13, further indicating that the heavy outflows consistently suffered by the fund since its conversion are waning. Nearly $17.6 billion has exited the fund since January.

Fidelity’s Bitcoin ETF posted the strongest inflow among spot exchange-traded funds with $111 million, followed by Ark 21Shares with $83 million, and BlackRock with $48 million.

However, despite the bullish signal from institutional investors, Bitcoin (BTC) posted a 4% pullback since tagging a local high of $64,120 on May 7. The move extends a multi-month streak of downward range-bound price action, with BTC hovering between $60,000 and $70,000 since March.

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BTC/USD. Source: CoinGecko.

Hong Kong ETF inflows crash

U.S.-based ETP providers led the pack with $135 million in inflows, followed by Hong Kong and Switzerland with $19 million and $14 million worth of inflows respectively. However, Hong Kong’s performance marked a nearly 94% drawdown compared to its previous week, which hosted a $307 million inflow.

“Hong Kong, after a prior week of record inflows, saw just US$19 million inflows, suggesting the majority of the first-week post-Bitcoin ETF launches were seed capital,” CoinShares reported.

According to Sosovalue, Hong Kong-based ETFs suffered their heaviest daily outflow on May 13 with $32 million.

Ethereum ETPs post outflows

While Bitcoin products hosted $144 million worth of inflows, Ethereum ETPs suffered a $14.4 million outflow as analysts anticipate that the U.S. Securities and Exchange Commission (SEC) will reject the pending cohort of spot Ether ETF hopefuls.

“Low interaction by the US regulators with ETF issuer applications for a spot Ethereum ETF increased speculation that the ETF approval is not imminent,” CoinShares said.

The SEC is expected to provide its verdict on May 23, which coincides with the final deadline for the spot Ether application from VanEck.

ETPs providing exposure to other altcoins drew modest inflows, including Solana (SOL) with $5.9 million, Polkodot (DOT) with $1.2 million, and XRP with $1.2 million.

ETP volume dries up

Weekly ETP trade volume trended low last week, with just $8B worth of shares changing hands. For comparison, crypto ETPs hosted $17 billion worth of weekly trades during April on average.

The data likely indicates that many investors are sitting on the sidelines and awaiting the market’s next move amid tightening range-bound price action. “These volumes highlight ETP investors are participating less in the crypto ecosystem at present,” the report said.


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