Institutional investors continue to pour capital into crypto funds as there is still hope for a Bitcoin ETF, according to CoinShares’ recent report. Over the past nine weeks, the European digital asset manager recorded net inflows of $346 million into crypto exchange-traded products (ETPs). Year-to-date deposits now total $1.5 billion, with Bitcoin-specific funds accounting for 90% of these inflows. Consequently, the total value of assets under management in crypto funds is now up to $45 billion.
An ETP is an investment product with shares listed on an exchange. The objective is to track the performance of certain underlying assets, such as Bitcoin and Ethereum, or benchmarks like stocks, bonds, commodities, and currencies. ETFs are part of the ETP umbrella, but vary in one significant way: a spot ETF would monitor the live price of Bitcoin, which is not possible with the approved Bitcoin ETFs.
The SEC has not allowed a spot Bitcoin ETF to trade in the US, citing too much volatility and risk of manipulation in the crypto markets. However, industry experts believe there is too much evidence to not expect an approval from the SEC soon. This speculation was reinforced by a false report of the BlackRock Bitcoin ETF being approved, which caused Bitcoin to spike 10% in October. Then, someone impersonated Wall Street titan BlackRock to file a fake iShares XRP Trust, causing the token to surge before the fraud was discovered and referred to the Delaware Department of Justice.
CoinShares is not only observing the race for a Bitcoin ETF in the US, but also taking part in it. Two weeks ago, it announced that it had obtained an option to acquire Valkyrie’s ETF business in the US. It has until January 10 to approve the deal, as Valkyrie applied for a Bitcoin ETF in 2021 and resubmitted for its Valkyrie Bitcoin Fund in June 2023.
