Surging Demand Lifts Crypto ETF Trading To A Record Of $19 Billion Amid Price Drops

In the aftermath of the recent market crash, crypto ETF products proved to be key in steering the course of the overall market recovery. After a sharp drop in total assets under management (AuM) to $75 billion following the carnage on August 5, the total rebounded significantly to $85 billion, effectively recouping over $20 billion lost during the correction.

Crypto ETF Products Record Trading Activity

CoinShares’ latest report shows the impact of these crypto ETF products, with trading activity soaring to $19 billion for the week, eclipsing the usual $14 billion weekly average observed thus far this year. 

The report also highlighted an uncommon trend of universal inflows across all regions, signaling a unanimous positive sentiment towards crypto assets post the recent price correction. 

Noteworthy contributions came from regions like the United States, Switzerland, Brazil, and Canada, with inflows of $89 million, $20 million, $19 million, and $12.6 million, respectively in the past week alone.

Ethereum, in particular, seemed to thrive amidst the market turbulence, attracting a substantial $155 million in inflows last week. This surge propelled its year-to-date inflows to $862 million, marking the highest inflow volume seen since 2021. 

Per the report, the surge in Ethereum inflows was largely attributed to the recent introduction of US spot-based Ethereum ETFs, highlighting the growing interest in alternative crypto 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 experienced outflows at the beginning of the week, a notable turnaround occurred in the final days with significant inflows amounting to $13 million for the week. 

Conversely, short crypto ETF products based on BTC faced their most substantial outflows since May 2023, accounting for a total of $16 million (23% of AuM). This trend led to a notable reduction in AuM for short positions, hitting its lowest level since the beginning of the year.

Further insights from SoSo Value data reveals that spot crypto ETFs recorded a net outflow of $169 million in the Bitcoin market. Among the standout figures, the Grayscale Bitcoin Trust ETF (GBTC) witnessed a weekly outflow of $392 million, while BlackRock ETF IBIT observed a notable inflow of $220 million. 

At the time of writing, the largest cryptocurrency on the market, Bitcoin, has dropped over 2% in the last 24 hours to a current trading price of $58,640. However, after recovering from last week’s crash toward $49,000, BTC is still up 18% over the previous seven days. 

Ethereum, on the other hand, has been 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% in the last seven days since recovering from an 8-month low of $2,112 last Monday.

Featured image from DALL-E, chart from TradingView.com