Crypto investment products see first outflows of the year amid Bitcoin’s ‘very high trading volumes’ News ▸ US ▸ Bitcoin ▸ Investments
Crypto investment products see first outflows of the year amid Bitcoin’s ‘very high trading volumes’
High-cost ETF issuers in the United States have reported substantial outflows from their funds since spot BTC ETFs were launched.
2 min read
Updated: Jan. 22, 2024 at 6:31 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Crypto-related investment products experienced their first outflow for this year, totaling $21 million, according to CoinShares’ latest weekly report.
The downturn coincided with an unprecedented surge in trading activity among Bitcoin products, reaching a staggering $11.8 billion last week. This remarkable volume was seven times higher than the average weekly volume recorded in the previous year.
Bitcoin leads outflows
The primary contributor to the outflow was Bitcoin, which saw the most significant net outflows of $25 million.
James Butterfill, CoinShares’ head of research, wrote:
“Bitcoin saw minor outflows totalling $25 million, although the $11.8 billion trading volumes represented 63% of all Bitcoin volumes on trusted exchanges, highlighting the ETP activity is currently dominating overall trading activity at present.”
The analyst, however, pointed out that BTC’s recent price weakness presented an opportunity for investors to add to their short-Bitcoin positions. Investment products in this class saw an inflow of $13 million. Over the past week, BTC’s price declined by nearly 5% to $40,511 as of press time, according to CyptoSlate data.
Other digital assets, including Ethereum, Solana, and Litecoin, also witnessed outflows of $13.6 million, $5.8 million, and $1.5 million, respectively.
“Blockchain equities saw further large inflows totaling $156 million, bringing the last nine-week run to $767 million,” Butterfill added.
Regionally, the U.S. stood out with a substantial inflow of $263 million, while Canada and Europe collectively experienced an outflow of $297 million. “There has been minor migration of assets to the U.S., where fees are currently more competitive,” Butterfill explained.
‘Higher-cost issuers’ experience outflows
Several high-cost issuers in the U.S., such as Grayscale, have witnessed a substantial outflow totaling $2.9 billion since the introduction of spot-based ETFs.
Grayscale’s GBTC leads this outflow with more than $2.8 billion withdrawn from the fund. CryptoSlate Insight attributed this trend to GBTC’s elevated 1.5% fee and likely profit-taking by investors exposed to its previous discount.
Another notable high-cost issuer, Purpose Bitcoin, has reported significant outflows exceeding $110 million.
Conversely, the recently introduced ETFs have garnered substantial inflows, totaling almost $4.1 billion during the same period.
These funds have, in part, drawn capital from investors exiting higher-cost ETPs. CryptoSlate reported that the “Newborn Nine” Bitcoin ETFs, led by BlackRock’s IBIT and Fidelity’s FBTC, have collectively accumulated 95,000 BTC, with their combined assets under management (AUM) reaching almost $4 billion as of Jan. 21.
Bitcoin Market Data
At the time of press 6:31 pm UTC on Jan. 22, 2024, Bitcoin is ranked #1 by market cap and the price is down 2.59% over the past 24 hours. Bitcoin has a market capitalization of $796.28 billion with a 24-hour trading volume of $22.87 billion. Learn more about Bitcoin ›
Crypto Market Summary
At the time of press 6:31 pm UTC on Jan. 22, 2024, the total crypto market is valued at at $1.59 trillion with a 24-hour volume of $55.09 billion. Bitcoin dominance is currently at 49.96%. Learn more about the crypto market ›
Mentioned in this article
Bitcoin 
Ethereum 
Litecoin 
Solana 
Grayscale Investments 
BlackRock 
Fidelity Investments 
Grayscale Bitcoin Trust 
Fidelity Wise Origin Bitcoin Trust iShares Bitcoin Trust Author 
Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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In this article
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,341.96
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Litecoin
$102.509
Litecoin is a peer-to-peer Internet currency that enables instant, near-zero cost payments to anyone in the world.
Solana
$186.386
Solana is a high-performance blockchain platform that utilizes a unique consensus algorithm called “Proof of History” to achieve fast transaction speeds and low fees.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.
Fidelity Investments
Fidelity Investments Inc., commonly referred to as Fidelity, is a multinational financial services corporation based in Boston, Massachusetts.
The Grayscale Bitcoin Trust (GBTC) is a digital currency investment product that provides investors with access to Bitcoin through traditional investment channels.
The Fidelity Wise Origin Bitcoin Trust (FBTC) is a spot Bitcoin ETF that offers investors exposure to the price of Bitcoin.
The BlackRock Bitcoin ETF, known as the iShares Bitcoin Trust (IBIT), is an investment fund that provides regulated exposure to Bitcoin for investors.
