The crypto market has witnessed a significant increase in inflows of funds into various digital assets, especially Bitcoin, in the past week. According to a report by BeInCrypto, the inflows reached $326 million, the highest level since July 2022. The report attributes the surge to the growing speculation and anticipation of a spot Bitcoin ETF approval by the US Securities and Exchange Commission (SEC).
The report by BeInCrypto, which cites data from CoinShares, reveals that Bitcoin accounted for 90% of the total crypto inflows last week, with $296.3 million. This indicates a strong demand and interest in the leading cryptocurrency, which has been trading above $30,000 for most of the year. The report also notes that some investors have been betting on a short-Bitcoin strategy, as evidenced by the $15 million inflows into short-Bitcoin investment products.
The dominance of Bitcoin in the crypto inflows is likely driven by the expectation that the SEC will soon approve a spot Bitcoin ETF, which would allow investors to directly buy and sell the underlying asset without the need for intermediaries or custodians. A spot Bitcoin ETF would also reduce the risks and costs associated with futures-based ETFs, which are currently the only option for US investors who want exposure to Bitcoin through a regulated vehicle.
Ethereum and Altcoins See Mixed Results Amid Positive Trend
While Bitcoin has been attracting most of the attention and capital in the crypto market, Ethereum and other altcoins have seen mixed results in terms of inflows. According to the report, Ethereum experienced a $6 million outflow last week, despite the positive trend for other altcoins. This could be due to the fact that Ethereum futures-based ETFs, which were launched in the US earlier this month, have not generated much enthusiasm among investors, as they only attracted $10 million in the first week.
On the other hand, Solana, which has been one of the best-performing altcoins this year, witnessed a rapid surge in inflows, achieving its highest levels since March 2022. It recorded weekly inflows of $24 million, solidifying its position as the “altcoin of choice” for many investors. Solana’s popularity is attributed to its high scalability, low fees, and innovative features, such as smart contracts, decentralized applications, and non-fungible tokens (NFTs).
Crypto Market Remains Optimistic Despite Regulatory Uncertainty
The crypto market has been showing signs of optimism and resilience despite the regulatory uncertainty and challenges that it faces. The SEC has been delaying its decision on several Bitcoin ETF applications, citing concerns over market manipulation, investor protection, and custody issues. However, many analysts and experts believe that the SEC will eventually approve a spot Bitcoin ETF, as the demand and innovation in the crypto space are too strong to ignore.
The crypto market has also been coping with the recent news that the estate of the now-defunct crypto exchange FTX has obtained approval to liquidate its crypto holdings, which include approximately $1.2 billion worth of SOL. The liquidation could potentially create a downward pressure on the price of Solana, as well as other crypto assets that were held by the exchange. However, the report by BeInCrypto suggests that the impact of the liquidation will be limited, as the market has already priced in the risk.