Bitcoin short ETPs record $1M weekly outflow anticipating spot BTC ETF approval

The digital asset investment products or exchange-traded products (ETPs) saw inflows of $151 million in the first week of 2024, according to data shared by CoinShares. The latest week of inflow brought the total inflows since the Grayscale vs. SEC lawsuit to $2.3 billion. 

The latest digital asset investment flow data paints a bullish picture for the crypto ecosystem in the lead-up to the potential approval of the first spot Bitcoin exchange-traded fund (ETF) in the United States as U.S based exchanges contributed 55% of the total investment flow over the past week.

Bitcoin ( BTC ) contributed the largest share of inflows at $113 million, followed by Ether ( ETH ) at $29.6 million. Altcoins that saw notable inflows include Cardano ( ADA ), Avalanche ( AVAX ) and Litecoin ( LTC ), with $3.7 million, $2 million and $1.4 million, respectively.

Another bullish sign for Bitcoin came in the form of outflows from Bitcoin short position, totaling over $1 million in the past week. Many market pundits earlier predicted that the potential approval of the BTC ETF could be a “buy the rumor, sell the news,” however, the latest digital asset investment flow data contradicts that claim as contrary to an increase in investment in Bitcoin short ETPs, there has been a significant outflow over the past several weeks.

Grayscale’s Bitcoin Trust (GBTC) traded nearly half a billion on Jan. 8, which is more than 99% of the 3,000 current ETFs in the market. On the same day, Bitcoin price hit another yearly high of over $46,000 and is currently trading at $46,865.

$GBTC traded close to half a billion today, which is more than 99% of the 3000 current ETFs, and reminder that they are bringing a (volume) gun to a knife fight if they launch with everyone else. That said, the 1.5% fee will act as a repellent. Another fascinating sub-plot. pic.twitter.com/506EG3PR7t

— Eric Balchunas (@EricBalchunas) January 8, 2024

ETPs offer a cost-efficient gateway for investors investing in crypto within a regulated framework. It is a type of financial instrument bought and sold on a regulated stock exchange that allows investors to gain exposure to the price movements of an underlying crypto asset without owning the asset itself.

Related: SEC reissues crypto ‘FOMO’ warning amid hope for spot Bitcoin ETFs

2024 has started on a bullish note for the crypto community, with a series of key milestone events, such as the potential approval of the first spot Bitcoin ETF in the U.S. slated for the second week of January and the Bitcoin halving scheduled for April later this year. The crypto market looks optimistic for the new year, as evidenced by the recent weekly investment flow data, with a positive net flow into various crypto ETPs and an outflow from the Bitcoin ETPs.

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