Bitcoin ETPs see record-breaking monthly inflows: K33 Research

Bitcoin ETPs see record-breaking monthly inflows: K33 Research

The Rise of Bitcoin Exchange-Traded Products: A Record-Breaking Influx of Investment

The blockchain industry has been abuzz with excitement as crypto investors have been pouring money into bitcoin exchange-traded products (ETPs) at an unprecedented rate. This surge in investment follows BlackRock’s filing for a spot-based ETF on June 15, which has seemingly ignited a frenzy in the market. New data from K33 Research reveals that the BTC-equivalent exposure of ETPs listed worldwide has increased by a staggering 25,202 BTC ($757 million) to reach a total of 196,824 BTC in just four weeks up to July 16. This influx of investment marks the second-highest monthly net inflow, surpassed only by the inflows witnessed after the launch of ProShares’ futures-based ETF and other futures-based ETFs in October 2021.

BTC-equivalent exposure of ETPs listed worldwide. (K33 Research)

The total BTC-equivalent exposure of ETPs is now at its highest level since June 2022, indicating a significant surge in investor confidence and interest in the blockchain industry. But what exactly are ETPs? ETPs are a broad category of listed products that track some form of underlying financial asset. Exchange Traded Funds (ETFs), on the other hand, are a specific subset of ETPs that typically hold a variety of financial products within a specific theme.

While the Securities and Exchange Commission (SEC) has made it challenging for crypto-based ETFs to be listed in the United States, Europe has taken a different approach. The European market offers a plethora of ETPs from a range of issuers, providing investors with more options and opportunities to invest in the blockchain industry.

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One notable ETP, BITO, has seen a remarkable increase in its bitcoin equivalent exposure, reaching an all-time high of 4,425 BTC. BITO offers investors bitcoin-linked returns through a regulated product and currently holds over $1 billion worth of CME Bitcoin Futures.

BITO’s BTC-equivalent exposure (K33 Research)

Interestingly, it has been observed that spikes in BITO’s exposure tend to occur near local market tops. However, BITO’s overall BTC exposure remained relatively stable from June 2022 until the past week when the market experienced a notable range breakout. This highlights the potential impact and influence ETPs can have on the market, as well as the importance of monitoring trends and patterns within the blockchain industry.

In June, BITO recorded its highest-ever weekly inflow as BTC prices surpassed $30,000. Another Toronto-listed bitcoin ETF, BTCC, offered by Purpose Investments, has also reported a significant increase in inward flow, further indicating the growing interest and investment in the blockchain industry.

The surge in investment in bitcoin ETPs is a testament to the increasing mainstream adoption and recognition of the blockchain industry. With more investors seeking exposure to cryptocurrencies and blockchain technology, the demand for ETPs has skyrocketed. This not only provides investors with an alternative investment avenue but also serves as a barometer of market sentiment and confidence in the blockchain industry.

In conclusion, the blockchain industry is experiencing an unprecedented influx of investment in bitcoin exchange-traded products. This surge in interest and confidence is fueled by BlackRock’s filing for a spot-based ETF, which has sparked a frenzy in the market. Despite the challenges faced by crypto-based ETFs in the United States, Europe has embraced ETPs, offering a wide range of options for investors. The rise of BITO and its impact on the market further emphasizes the importance of monitoring trends and patterns within the blockchain industry. With the increasing mainstream adoption of cryptocurrencies and blockchain technology, the demand for ETPs is expected to continue to rise. The blockchain industry is undoubtedly entering a new era of growth and opportunity, attracting both institutional and individual investors alike.

Edited by Omkar Godbole.