A Bullish Beginning? $151 Million Poured Into Crypto Funds In 2024’s First Week

The first week of 2024 marked a notable milestone in crypto asset investments. Investment products in this particular sector witnessed inflows amounting to $151 million, according to a recent report from CoinShares.

Crypto Asset Funds Sees Surge In Inflows

This $151 million surge in inflow, as highlighted by James Butterfill, Head of Research at CoinShares, is particularly noteworthy in light of the Grayscale vs. US Securities and Exchange Commission (SEC) lawsuit, with these inflows contributing to a total of $2.3 billion since the case began in October 2022.

This amount accounts for 4.4% of the firm’s total managed assets. Even without a spot exchange-traded fund (ETF) launch in the US, Butterfill revealed that American exchanges contributed to over half of these inflows, at 55%. German and Swiss exchanges followed, contributing 21% and 17% of the inflows, respectively.

Bitcoin emerged as the leader in investment inflows, amassing $113 million. This substantial sum equates to 3.2% of the total assets under management (AuM) in the last nine weeks.

James Butterfill pointed out an interesting trend that challenges the anticipation of the US SEC approval of a spot Bitcoin ETF being a “buy the rumor, sell the news” event. Butterfill noted in the report:

If many truly believed that launch of the [spot] ETF in the US would a “buy the rumour, sell the news” event, we surely would expect to see inflows into short-bitcoin ETPs, instead, outflows over the last 9 weeks have amounted to US$7m.

Notably, this is because “buy the rumor, sell the news” implies that investors buy assets ahead of an anticipated event (like the spot ETF launch) and sell them when the actual event occurs, often leading to a price decline.

However, the observation here by Butterfill is quite the opposite. Instead of seeing inflows (more investment) into short-Bitcoin exchange-traded products (ETPs) (which benefit from a decline in Bitcoin’s price), there have been outflows amounting to $7 million over the last nine weeks.

This indicates that investors might not expect a significant price drop following the spot Bitcoin ETF launch in the US, contradicting the “buy the rumor, sell the news” expectation.

Ethereum And Altcoins: A Mixed Bag Of Sentiments

Ethereum’s performance in the crypto asset investment space has also been noteworthy. The second-largest crypto by market cap saw inflows…