Bitcoin ETFs Fall Back to Capital Flow Levels of 2024
In recent weeks, news has accumulated that the first approval of a Bitcoin ETF for the American market is not far away. Leading asset managers such as BlackRock and VanEck are determined to bring a Bitcoin Spot ETF to the securities market. Investors’ appetite is considered to be great, and the price of Bitcoin has been on the rise in anticipation. But the latest data from the asset management company CoinShares shows a different picture for Europe, where Bitcoin ETFs have been able to be traded regularly for years.
CoinShares reports that the capital flow of Bitcoin ETFs has fallen significantly in the past week. Buying interest is at the lowest level since April 2024, they write. The significant negative trend of 310 million US dollars in outflows mainly results from positions in Europe and Canada. There, cheap valuations for Bitcoin have led to these withdrawals from existing accounts.
CoinShares suspects that behind the caution of European institutional investors lies the prospect of a Bitcoin Spot ETF in the US still being approved in 2024, which would then be superior to previous exclusively European products. So there are temporary effects that make the noticeable outflows of Bitcoin ETFs in Europe understandable. The data for most European Bitcoin ETFs, however, is not published regularly, and thus only trustworthy sensitive data from CoinShares and research is available.
But the question remains: Why should institutional investors say goodbye to their Bitcoin investments now of all times?
One explanation is liquidity management, since the market for cryptocurrencies has not fully recovered from the collapses of 2022. Another indication comes from the weakening courses of Bitcoin and other crypto assets in September, which particularly deter institutional decision-makers. However, none of these factors can be completely identified as the cause, as the net outflow of institutional capital continues.
At the same time, CoinShares records capital inflows into Ethereum despite the correction phase of its price level, albeit moderate compared to previous months. Investors were convinced by Ethereum’s successful switch to Proof of Stake (PoS) this year for a more efficient blockchain. In any case, market commentators continue to show increasing confidence that an approval of a Bitcoin Spot ETF in the US would revive crypto markets. Whether Bitcoin ETF products, as in the past, can generate new capital flows across Europe and globally remains to be seen.
Leave a Reply