Institutional Buying Opportunities Bitcoin ETF Rebounds after Weeks of Decline

CoinShares data shows that some institutions may buy Bitcoin as digital asset investment products earned $441 million last week, with Bitcoin falling to its lowest price since February. CoinShares wrote that $398 million was locked in Bitcoin, the largest cryptocurrency by market value, while Solana and Ethereum funds received $16 million and $10 million in funding respectively.
Despite a 9% drop in Bitcoin price to $56,000 last week, stimulated by the German government’s sale of seized Bitcoin and the impending repayment to Mt. Gox creditors, there are still people buying Bitcoin. So far this year, Bitcoin-based funds have seen inflows of $15.8 billion.
James Butterfill, Research Director at CoinShares, wrote, “The recent price weakness caused by selling pressure is likely to be viewed as a buying opportunity.” He added that trading volumes for cryptocurrency-related funds are still relatively low at $7.9 billion.
This week’s funding comes after a period of sustained outflows, with cryptocurrency funds seeing inflows of over $1 billion in the previous three weeks.
Butterfill wrote that Solana has consolidated its position as the best-performing alternative coin in terms of fund inflows. So far, its $57 million inflow has surpassed the total funding for XRP ($18 million), Cardano ($9 million), and Polkadot ($25 million).
Butterfill wrote that the strong inflows into Solana and Ethereum funds this week have created unusual conditions, with Bitcoin attracting only 90% of the inflows. Typically, Bitcoin has a larger proportion of the inflows.
Butterfill told Decrypt, “Investors are looking more broadly at the cryptocurrency market due to the harsher punishment altcoins are receiving (compared to Bitcoin). It’s as simple as that.”
However, Ethereum funds have seen outflows of $15 million year-to-date, making it the only major cryptocurrency in the field with outflows. Nevertheless, with $10 million in weekly inflows, “sentiment appears to have shifted towards Ethereum,” Butterfill wrote.
This shift aligns with expectations for the approval of regulatory filings that would allow Ethereum spot ETFs to trade. Bloomberg ETF analyst James Seyffart recently predicted that trading for these products could start later this week.
Bloomberg ETF analyst Eric Balchunas wrote on Monday, “For Ethereum, it should be an information-rich day and week.” “Stay tuned.”
For Ethereum, the listing of spot ETFs in the United States could give a boost to the second-largest cryptocurrency by market capitalization. According to K33 Research data, while the inflows in the first year could reach $4 billion, the asset has recently experienced volatility, dropping to its lowest price since mid-May.
Despite little change in Ethereum’s price on Monday, the asset has given up gains since the sudden approval of Ethereum spot ETFs by the U.S. Securities and Exchange Commission. After reaching a high of $3,900 in May, Ethereum’s price has fallen below $3,000.
Edited by Andrew Hayward