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Bitcoin continues to dominate digital asset funds with 4th consecutive week of inflows

Bitcoin-backed funds from the U.S. ushered most of $598 million in digital asset investment product inflows last week.

Crypto-based investment vehicles have recorded their fourth consecutive week of inflows, totaling over $5.7 billion for the year, putting 2024’s assets under management (AUM) at roughly 55% of 2021’s output, a year of record digital asset product inflows and the peak of crypto’s previous bull cycle. 

According to a CoinShares report, the U.S. continued to lead regional inflows with spot Bitcoin (BTC)  ETFs drawing huge demand, but exits from Grayscale dampened overall numbers. This area saw $610 million flow into digital assets funds while GBTC shed $436 million in another week of outflows. 

Brazil, Switzerland, and Australia trailed the U.S. for flows but accounted for most non-American influx into these digital assets products. Ethereum spearheaded altcoin fund inflows with $17 million, while blockchain equities indicated skepticism, with investors pulling out $81 million. 

BlackRock, Fidelity Bitcoin ETFs ahead of competitors

CoinShares highlighted the introduction of spot Bitcoin ETFs as the constant presence in weekly inflows since its Jan. 11 debut. Two issuers, BlackRock and Fidelity, remain heads and shoulders above competitors in this market, including incumbent Grayscale.

While the two do not boast Grayscale’s AUM yet, BlackRock and Fidelity have garnered over $10 billion combined in less than three months. Funds from these two issuers were some of the fastest ETFs to hit $1 billion in AUM after launch, signaling interest from Wall Street investors. 

Analysts and experts predict this demand may drive Bitcoin toward a parabolic price run if sustained. Fundstrat co-founder Thomas J. Lee said BTC could reach $150,000 by December this year, and Matrixport sees a $63,000 Bitcoin by March. This would place BTC less than 10% away from its previous all-time high.

BTC chart | Source: TradingView

The continued growth of digital asset investment products, particularly those backed by Bitcoin in the U.S., points to a strong trend towards mainstream adoption of cryptocurrencies as legitimate investment vehicles. With over $5.7 billion in inflows for the year and the AUM nearing 2021 levels, it is evident that the interest in digital assets is steadily increasing.

While the U.S. continues to lead in terms of regional inflows, other countries such as Brazil, Switzerland, and Australia are also showing significant interest in digital asset investment products. This global trend underscores the growing acceptance and recognition of cryptocurrencies as an integral part of the financial landscape.

The introduction of spot Bitcoin ETFs by issuers such as BlackRock and Fidelity has further fueled the demand for digital asset investment products. These ETFs have quickly amassed billions of dollars in AUM, with analysts predicting even more growth in the coming months.

The potential for Bitcoin to reach new price milestones, as suggested by industry experts, highlights the optimism surrounding the cryptocurrency market. If these predictions hold true, it could signify a significant milestone for Bitcoin and further validate its position as a formidable investment option.

Overall, the outlook for digital asset investment products looks promising, with increasing interest from institutional investors and a bullish market sentiment driving the sector forward.

As we move forward in 2024, it will be interesting to see how these trends evolve and how digital assets continue to shape the investment landscape.

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