Investment into Cryptocurrency Products Experiences First Rise in Several Weeks Amid Lower Trading Activity

According to the most recent data shared by CoinShares in their weekly update, investment vehicles tied to cryptocurrencies have seen an injection of capital amounting to $130 million over the prior week, a notable turnaround after a protracted period of outflows.

This uptick in inflows signals a reversal in investor mood, despite the fact that trading activity within these products, particularly ETPs (exchange-traded products), appears to be waning with volumes on the decline.

Commenting on the situation, James Butterfill, CoinShares’ lead researcher, indicated that trading volumes were recorded at $8 billion for the week, a figure sharply lower than April’s typical volume of $17 billion. He further elaborated:

“The current trading volumes underline a reduced engagement by ETP investors in the cryptocurrency space, representing 22% of total exchange volumes on globally recognized platforms, down from 31% in the previous month.”

Spot Bitcoin ETFs Bolster Investment Inflows

Spot Bitcoin ETFs in both the United States and Hong Kong continue to attract capital, as per the findings of the CoinShares report.

The influx of American investments is attributed primarily to the newly established Nine Bitcoin ETFs, generating inflows of $135 million.

In contrast, outflows from Grayscale’s GBTC have been tapering off, with the past week seeing the smallest amount withdrawn since January—a sum of $171 million. This trend is covered in further detail here.

Meanwhile, the newly rolled-out Bitcoin ETFs in Hong Kong recorded inflows of $19 million, suggesting that initial inflows post-launch were largely seeded funds.

Elsewhere, crypto ETPs in Canada and Germany experienced outflows of $20 million and $15 million respectively, culminating in a collective year-to-date withdrawal of $660 million from these nations.

Speculation Around Ethereum ETFs Results in Withdrawals

As reported by CoinShares, the uncertainty regarding the approval of spot Ethereum ETFs is affecting investors’ sentiment toward the second most valued cryptocurrency by market cap.

The company sheds light on the situation, stating:

“A lack of engagement from U.S. regulatory authorities on ETF applications seeking to establish spot Ethereum products has fueled speculations that approval might not be forthcoming. This sentiment was mirrored in the outflows that summed up to $14 million in the previous week.”

Additionally, funds betting against Bitcoin have seen a cumulative outflow of $18 million over the last eight weeks, with a $5.1 million withdrawal recorded last week alone.

In a contrasting scenario, altcoins such as Polkadot, XRP, and Solana experienced a collective inflow nearing $8 million.

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