Key Points
- Cryptocurrency investment products recorded a total inflow of $130 million in the week ending May 6, ending a five-week outflow streak.
- Bitcoin (BTC) investment funds were the major contributors, with inflows of $144 million.
Investment products in the cryptocurrency sector noticed a total influx of $130 million in the week that ended on May 6. This marked an end to a continuous five-week period of outflows.
Institutional Investors Increase Crypto Exposure
The report released on May 13 indicated that institutional investors have increased their exposure to digital assets. The total inflows into crypto investment products for the week were $130 million.
The majority of the movement was due to Bitcoin (BTC) investment funds, which saw inflows of $144 million. However, the weekly trading volumes in investment products decreased from a weekly average of $17 billion in April to $8 billion in the week ending May 10.
Market Uncertainties and Inflows
The data was released amidst heavy selling and uncertainties surrounding U.S. inflation data ahead of the week’s CPI data reading. Nearly $116.8 million was poured into spot Bitcoin ETFs between May 6 and May 10 as the exodus from Grayscale’s GBTC tapered off.
Institutional capital continued to flow into U.S. spot Bitcoin ETFs, recording the largest-ever inflow since May 6. Fidelity, Bitwise, and VanEck’s spot Bitcoin ETF funds were the only products that contributed to the inflows on May 13. Fidelity’s Bitcoin fund emerged as the biggest gainer on the day, with $20.3 million in inflows.
The report also revealed that the United States, Switzerland, Hong Kong, Australia, and Brazil showed inflows regionally. The largest regional outflows came from Canada, with $20 million.
Increased Exposure to Bitcoin
The inflows into crypto investment funds were also accompanied by news of the State of Wisconsin Investment Board revealing its exposure to spot Bitcoin investment. In a 3F filing with the United States Securities and Exchange Commission (SEC) on May 14, the Board disclosed that it had purchased 94,562 shares of BlackRock’s iShares Bitcoin Trust (IBIT) in the first quarter of the year.
The Board also revealed that it had purchased roughly $64 million worth of Grayscale’s Bitcoin Trust (GBTC) shares. The Board’s filing was considered one of the most important disclosures for Bitcoin so far and is expected to be closely analyzed by other investment boards.
The interest in spot Bitcoin ETFs by the Board seems to have come sooner than expected. This is a good sign for the market, with expectations of more institutions to follow. The disclosure signifies a significant move by the Wisconsin Investment Committee into the digital asset market. Spot Bitcoin ETFs offer investors exposure to Bitcoin without needing to own the cryptocurrency directly. This move could potentially signal a growing adoption of crypto investment products among traditional finance firms.
