The crypto market seems to be experiencing a renewed vigor as digital asset management firm CoinShares reports that crypto-based investment products witnessed their largest single weekly inflows since July 2022, totaling $199 million.Bitcoin took the lion’s share, garnering a staggering $187 million, which may have been catalyzed by a recent flurry of spot Bitcoin ETF applications filed with the U.S. Securities and Exchange Commission (SEC).
This resurgence is exemplified by the fact that the total assets under management of crypto investment products reached a yearly high, surpassing $37 billion. This marks a swift recovery following the shockwaves sent through the market by Three Arrows Capital’s bankruptcy in July 2022. With ETC Issuance GmbH’s Bitcoin exchange-traded product, BTCE, sitting at the top of the heap, it’s no surprise that Bitcoin is surging.
On the other hand, Ethereum struggled to keep pace, as inflows towards Ethereum investment products totaled $7.8 billion, significantly less than those of Bitcoin. CoinShares analyst James Butterfill acknowledges this disparity, noting that “appetite for Ethereum is lower than Bitcoin at present.”
Interestingly, the boost in positive sentiment towards Bitcoin seems to have been largely due to the recent spike in ETF applications from major players such as BlackRock, which is essentially acting as a catalyst for the market. Meanwhile, others like Valkyrie, WisdomTree, and Invesco followed BlackRock’s lead and submitted their own filings to the SEC.
Despite Bitcoin claiming the majority of the spotlight, it appears that this positive sentiment did not necessarily translate to other altcoins. Only minor inflows into XRP and Solana (SOL) were registered, further highlighting Bitcoin’s current dominance over the market.
However, it’s important to maintain a healthy dose of skepticism as the market remains unpredictable. While current investment levels seem promising and could signify a brighter future for Bitcoin and the crypto market as a whole, the possibility of sudden downturns should not be disregarded. The fact that alternative cryptocurrencies are experiencing slower levels of inflow compared to their major counterparts further underlines the need to tread cautiously in these rapidly evolving markets.
Overall, the crypto market is currently demonstrating a strong pivot towards Bitcoin, buoyed by the rising number of ETF applications with the SEC. Investors must remain vigilant and consider a diverse portfolio as a potential means to safeguard against sudden market shifts, lest this recent surge of optimism proves to be fleeting.
Source: Decrypt
