Digital Asset Funds Surpass $1 Billion in Net Inflows, Fueled by Bitcoin Optimism
Digital asset funds have witnessed a significant influx of over $1 billion this year, with a substantial portion directed towards Bitcoin-focused investments, according to a report by CoinShares. Bitcoin investment funds have reached an all-time high, holding 863,434 BTC, as reported by ByteTree.
This surge in Bitcoin holdings aligns with the ongoing rally of the cryptocurrency, buoyed by optimism surrounding the potential approval of a spot exchange-traded fund (ETF). ByteTree’s data indicates that Bitcoin holdings reached this record high during the current week, surpassing the previous peak set in April 2022. Over the past month alone, these funds have added approximately 22,100 bitcoins to their portfolios.
Charlie Morris, the founder of ByteTree, attributed the recent strength in Bitcoin’s price to the increased holdings by investment funds. The anticipation of forthcoming approvals for spot BTC ETFs has further fueled investor interest and contributed to the cryptocurrency’s robust performance.
Beyond Bitcoin-specific funds, the broader spectrum of digital asset funds has also experienced a surge in capital inflows. CoinShares, a digital asset management firm, reported a noteworthy $767 million in net inflows over the past six weeks—the highest observed over a similar timeframe since the 2021 bull market. James Butterfill, CoinShares’ Head of Research, highlighted that total inflows into digital asset funds for the year have now exceeded $1 billion.
Bitcoin remains the predominant catalyst for these inflows, with investors seeking exposure to its rising prices in anticipation of imminent spot BTC ETF approvals. Despite the recent positive developments, Matt Hougan, Chief Investment Officer at Bitwise Asset Management, suggests that the pricing in of spot ETF approval is still underway. According to Hougan, a significant number of financial advisors continue to believe that a spot ETF approval is unlikely until 2025 or later.
In the midst of this bullish trend, Bitcoin reached an 18-month high of $37,960 earlier this week, marking a 39% increase in the past month and a remarkable 125% surge year-to-date. At the time of reporting, Bitcoin is trading at approximately $37,300.