Big money continues to pour into Bitcoin and other cryptocurrency ETFs, despite market fears.
Net inflows into US-based spot exchange-traded funds (ETFs) tracking various cryptocurrencies surged this week, with over $244million pouring in for Bitcoin on Wednesday alone, taking its total net capitalisation to nearly $61 billion since inception. Ether ETFs saw a total of $175.3 million drawn over two days, pushing their collective inflow to around $114.6 million.
SoSoValue, an investment analytics platform, has reported that Bitcoin and Ether have experienced the greatest net inflows, with Ethereum being particularly attractive during this period. The company further noted a slight drop in the Crypto Fear & Greed Index score, which indicates market sentiment.
Farside Investors, another analyst, has claimed that despite crypto ETFs experiencing record-breaking inflows for Bitcoin and Ether in recent days, they are still not considered to be fully invested as the bullish sentiment could lead to higher valuations.
CoinGecko, a well-known blockchain data analytics firm, added its two cents by suggesting that while crypto market volatility may have scared away some potential investors, it has also driven many others to buy at cheaper rates.
The Crypto Fear & Greed Index revealed on Wednesday that the score had fallen from 27 (indicating “Extreme Fear”) to 25 in the space of just one day, suggesting a shift towards caution and risk aversion among investors.
Despite market volatility, Bitcoin ETFs have not only been attracting record net inflows but are also considered as a hedge against inflation by some financial analysts. They argue that these funds can act as an alternative to traditional assets and provide diversification for investment portfolios.
It’s clear that despite concerns over the crypto markets broader direction, spot Bitcoin ETFs continue to draw in substantial amounts of capital due to their perceived safety and value as a hedge against inflation. It remains to be seen how long this trend will continue, but one thing is for certain: investors are keeping an eye on these funds with keen interest.
Written by Oliver Grant
Markets Desk
