Anika Begay
Following the recent market crash, cryptocurrency ETFs have proven to be instrumental in steering the course of the overall market recovery. After a sharp decline in total assets under management (AuM) to $75 billion following the carnage on August 5, the total has rebounded significantly to $85 billion, effectively recovering over $20 billion lost during the correction.
Cryptocurrency ETFs record trading activity
The latest from CoinShares relationship shows the impact of these crypto ETF products, with trading activity rising to $19 billion for the week, eclipsing the usual weekly average of $14 billion seen so far this year.
The report also highlighted an unusual trend of universal inflows across all regions, signaling a unanimous positive sentiment towards cryptocurrencies following the recent price correction.
Notable contributions came from regions such as the United States, Switzerland, Brazil, and Canada, with inflows of $89 million, $20 million, $19 million, and $12.6 million, respectively, in the last week alone.
Ethereum, in particular, seemed to thrive amid the market turbulence, attracting a hefty $155 million inflow last week. This surge pushed its year-to-date inflows to $862 million, marking the highest inflow volume seen from 2021.
According to the report, the surge in Ethereum inflows was largely attributed to the recent introduction of spot Ethereum ETFs in the United States, highlighting the growing interest in alternative cryptocurrency ETF products, beyond Bitcoin and its index fund market approved in January in the same country.
Investors shift focus to long positions
While Bitcoin initially experimented outflows There has been a notable turnaround in the past few days at the beginning of the week, with significant inflows amounting to $13 million per week.
In contrast, BTC-based crypto short ETF products saw their largest outflows since May 2023, totaling $16 million (23% of AuM). This trend led to a significant reduction in AuM for short positionsreaching its lowest level since the beginning of the year.
Further insights from SoSo Value data reveals that spot cryptocurrency ETFs have seen a net outflow of $169 million into the Bitcoin market. Among the notable figures, the Grayscale Bitcoin Trust ETF (GBTC) has seen a weekly outflow of $392 million, while the BlackRock ETF IBIT has seen a notable inflow of $220 million.
At the time of writing, the largest cryptocurrency on the market, Bitcoin, has dropped more than 2% in the last 24 hours to a current value trading price of $58,640. However, after recovering from last week’s plunge towards $49,000, BTC is still up 18% over the previous seven days.
Ethereum, on the other hand, is up 1.1% over the past 24 hours, with the token trading at $2,660. Like Bitcoin, ETH has seen significant gains of nearly 22% over the past seven days since recovering from an 8-month low of $2,112 last Monday.
Featured image from DALL-E, chart from TradingView.com
