Billions are being returned to bitcoin exchange-traded funds (ETFs), but statistics alone don’t reveal how much demand comes from institutions, according to CoinShares.
US crypto investment products attracted nearly $4.1 billion in September, with BlackRock’s iShares Bitcoin Trust ETF (IBIT) accounting for more than 53% of those inflows, James Butterfill, head of research at CoinShares, told Cointelegraph.
Crypto investment products attracted nearly $3.5 billion across the industry in the past five trading days, CoinShares said in a Sept. 25 market filing. Update.
Asked if institutional investors are returning to crypto, Butterfill said, “Possibly yes, but it’s very difficult to separate institutional and retail money in the ETF world.”
ETF purchases may reflect arbitrage strategies as well as bets on bitcoin price increases, making flows an imperfect measure of bullish sentiment. Butterfly sees investors looking beyond tokens to businesses that benefit from crypto adoption.
IBIT provides clues to institutional needs
Butterfill said many institutional investors use IBIT to trade on a bitcoin basis.
strategy involved Buying shares of spot bitcoin ETFs while shorting bitcoin futures, they combine with the goal of profiting from the difference between spot and futures prices.
“At the moment the base trade has an attractive yield of 6%, and month-to-date IBIT has seen over 53% of the $4.1 billion flow,” Butterfill said.
The figures suggest that positive sentiment is broad-based among both institutional and retail investors, he added.
More recent CoinShares data shared with Cointelegraph showed that inflows into US crypto investment products rose to around $4.44 billion in September, compared to $4.53 billion globally. Bitcoin (BTC) products led the flow with $2.84 billion, followed by Ether (ETH) with about $946 million, while Zcash (ZEC) came in third with $284 million.
CoinShares digital asset rotation point
Butterfill also pointed to increased investor interest in companies making money from crypto adoption.
“The rotation in digital assets deserves more attention,” he said, pointing to Coinshare data from early September that showed more than $100 million had flowed into blockchain equity in the previous month.
Related: US crypto ETF cools after $3.3B week but holds the line
Butterfill expects investors to pay close attention next year to businesses generating revenue from tokenization, payments and trading infrastructure as markets expand.
He pointed to estimates that stablecoin assets could approach $4 trillion by the end of the decade and said HyperLiquid was recording up to $9 billion in daily trading volume.
magazine: The offseason is coming – and traders are more prudent this time
