Bitcoin led investment spending last week, recording inflows of more than $1.97 billion, while Ethereum had its strongest week since March, recording inflows of nearly $70 million.
Expectations are growing among some traders for continued buying activity in Ethereum tracking products, with the asset’s price expected to reach the $10,000 level by 2024.
Asset management firm CoinShares said in a report released Monday that nearly $2 billion flowed into cryptocurrency investment products last week, marking the fifth straight week of inflows of more than $4.3 billion.
Exchange-traded product (ETP) trading volume reached $12.8 billion this week, up 55% from the previous week. Bitcoin dominated the investment landscape, attracting over $1.97 billion in inflows, while Ethereum recorded its highest inflows since March, totaling $70 million.
In the U.S., buying activity for spot Bitcoin exchange-traded funds (ETFs) has surged since mid-May, following a sluggish period in April that saw zero net inflows across all products. In particular, BlackRock’s IBIT, one of its flagship products, was leaked during this period. However, inflows have since rebounded, with IBIT emerging as the largest Bitcoin ETF last week, accumulating more than $20 billion in asset value since its January issuance.
CoinShares analyst James Butterfill noted that inflows have been observed across almost all providers, with outflows from established players continuing to slow. Positive price action helped total assets under management (AuM) surpass $100 billion for the first time since March this year.
Butterfill suggested that the surge in Ethereum buying was likely triggered by the SEC’s surprise decision to approve a spot Ether ETF.
Traders expect continued inflows into Ether products over the coming months, with a rebound expected towards the end of the year. Ed Hindi, Chief Investment Officer at Tyr Capital, believes that in the short to medium term, Ether products could attract $5 billion to $10 billion of new capital, potentially setting a new record for ETH and its ecosystem’s year-end rally. Hindi believes the 2024 price target of $10,000 is reasonable, especially considering Ether’s transformation into a deflationary asset.
Last May, the U.S. Securities and Exchange Commission (SEC) approved key regulatory filings related to the ETH ETF, marking a historic milestone for the second-largest cryptocurrency. The approval included documentation of eight ETFs from a variety of providers including VanEck, Fidelity, Franklin, Grayscale, Bitwise, ARK Invest 21Shares, Invesco Galaxy and BlackRock for listing on major exchanges.
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