Significant $130M surge in crypto fund investments accompanied by new institutional BTC ETF buyers

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Last week, the tide turned for cryptocurrency investment products, which witnessed $130 million in new inflows, effectively halting a five-week sequence of declines. Detailed in the "Digital Asset Fund Flows Weekly" report released on May 13, this surge indicates a renewed interest from institutional investors in digital currencies. 

Bitcoin ETF investment funds stood out, drawing an impressive $144 million, which made up the bulk of these inflows and signaled a strong preference among investors for the flagship cryptocurrency.

Last week saw a sharp decline in trading volumes for cryptocurrency investment products, dropping from a monthly average of $17 billion in April to just $8 billion. This decline was influenced by heavy selling and market uncertainties ahead of the U.S. CPI data release. 

Despite this downturn, there was notable activity in the spot Bitcoin ETF market, where institutions invested nearly $116.8 million between May 6 and May 10. The report highlighted significant inflows into U.S. spot Bitcoin ETFs, marking a record since the beginning of May. 

On May 13, spot Bitcoin ETF funds from three trading companies were the sole contributors to inflows, with one fund gaining $20.3 million. Regionally, while the U.S. and several other countries saw inflows, Canada experienced the largest outflows at $20 million. 

In a recent SEC filing on May 14, the Board disclosed its acquisition of 94,562 shares in BlackRock's iShares Bitcoin Trust during the first quarter of the year. This growing interest in crypto funds, especially Bitcoin ETFs, indicates a potential shift towards broader acceptance within the traditional financial terrain.

The investment committee, known as SWIB, disclosed in a filing that it invested approximately $64 million in Grayscale's Bitcoin Trust (GBTC) shares. According to the asset management firm MacroScope, this filing is seen as one of the most pivotal disclosures for Bitcoin to date and is expected to be carefully examined by other investment boards, potentially influencing their investment strategies. 

As of May 14, 2024, U.S. Bitcoin ETFs collectively hold 830,301.66 BTC, which represents approximately 3.954% of the total Bitcoin supply. The leading holders include Grayscale Bitcoin Trust, with 296,713.9 BTC, iShares Bitcoin Trust, with 274,462 BTC, and Fidelity Wise Origin Bitcoin Fund, with 152,902.7 BTC. 

Other notable ETFs include the ARK 21Shares Bitcoin ETF, the Bitwise Bitcoin ETF, and the Vaneck Bitcoin Trust. Ethereum, on the other hand, is priced at approximately $2,903.07 and has shown a daily decrease of 0.08%. 

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash