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The cryptocurrency exchange-traded products (ETPs) market has witnessed a remarkable surge following former U.S. President Donald Trump’s announcement of a strategic crypto reserve initiative. With major players like BlackRock and Fidelity leading the charge, this policy has ignited significant investor interest, underscoring the growing institutional appetite for digital assets.
Cryptocurrency ETPs offer investors regulated and secure access to Bitcoin, Ethereum, and other digital assets without directly owning them. Functioning similarly to traditional ETFs, these products simplify market access for institutional investors while appealing to individual participants seeking structured exposure to the volatile crypto market.
$1.9 Billion Weekly Inflow into ETPs
A report published by CoinShares on January 27 revealed a staggering $1.9 billion inflow into cryptocurrency ETPs last week. This development, attributed to Trump’s strategic reserve proposal, has brought the year-to-date (YTD) fund inflow to $4.7 billion. While this marks a notable milestone, it reflects a 13% decline compared to the previous week’s inflows.
Bitcoin ETPs Dominate the Market
Bitcoin-focused ETPs remain the undisputed leader in the space, attracting $1.6 billion of last week’s inflows. Since the start of the year, Bitcoin ETP investments have reached $4.4 billion, accounting for an impressive 92% of total crypto ETP investments.
Bitcoin’s price hitting an all-time high of $109,000 on January 20 played a pivotal role in boosting investor confidence. Interestingly, even short Bitcoin ETPs recorded $5.1 million in inflows during the same period. The total assets under management (AUM) for cryptocurrency ETPs now stand at $171 billion, with Bitcoin products commanding 82% of this market.
Ethereum and Altcoin ETPs Gain Traction
Ethereum-based ETPs also showed resilience, recording $205 million in inflows last week despite earlier selling pressure. The total YTD investment in Ethereum products now stands at $177 million.
Among altcoins, notable ETP inflows included:
- Solana (SOL): $6.9 million
- Chainlink (LINK): $6.6 million
- Polkadot (DOT): $2.6 million
However, XRP ETPs experienced a 40% week-over-week decline, attracting $18.5 million in inflows. Despite these fluctuations, CoinShares reported no outflows across digital asset investment products last week, a testament to sustained market interest.
BlackRock Leads as Grayscale Faces Outflows
The dominance of BlackRock in the crypto ETP space continues, with the firm recording $1.5 billion in weekly inflows, representing 76% of total investments. This brings its YTD inflows to $2.9 billion, and its total AUM now stands at $64 billion.
Fidelity and ARK Invest followed with $202 million and $173 million inflows, respectively. In contrast, Grayscale faced continued outflows, with $124 million withdrawn last week, pushing its YTD outflows to $392 million.
Conclusion
Trump’s strategic crypto reserve proposal has undeniably influenced the digital asset landscape, sparking heightened interest in cryptocurrency ETPs. With major players like BlackRock driving significant inflows, the future of regulated crypto investments seems promising.
Stay tuned to Turkish NY Radio for the latest insights into the evolving cryptocurrency market.
