Bitcoin ETPs Now Represent Over 7% of BTC's Market Capitalization

Bitcoin exchange-traded products (ETPs) have reached a new milestone, now accounting for more than 7% of Bitcoin's total market capitalization. This development comes amid consistent inflows into crypto investment products, which have shown positive momentum for five consecutive weeks, according to the latest data from CoinShares.

Inflows into Crypto Investment Products Continue

In its February 10 report, CoinShares revealed that digital asset investment products saw inflows totaling $1.3 billion last week, extending a streak of positive inflows. This marks the fifth consecutive week of growth, with total year-to-date inflows now amounting to $7.3 billion. Despite recent price declines, the growing demand for crypto investment products demonstrates strong investor interest in digital assets.

Bitcoin Sees $407 Million in Inflows

Bitcoin, the market leader, experienced inflows of $407 million. As a result, Bitcoin ETPs now represent 7.1% of its total market capitalization. This figure reflects growing institutional interest in Bitcoin and highlights the increasing role of ETPs as a key vehicle for gaining exposure to the cryptocurrency.

Ethereum Leads with $793 Million in Inflows

Ethereum, meanwhile, led the pack with $793 million in inflows during the same period. Despite its price dipping to around $2,100, the drop spurred “significant buying-on-weakness,” according to James Butterfill, head of research at CoinShares. Ethereum's dominance in the inflow data underscores the continued enthusiasm for the second-largest cryptocurrency, as investors capitalize on price dips.

Global Inflows Widespread

Regional inflows into crypto investment products were also diverse. The U.S. remained the largest contributor, allocating $1 billion to digital asset investment products. Other regions showed strong support as well, with Germany, Switzerland, and Canada investing $61 million, $54 million, and $37 million, respectively.

Cryptocurrencies like XRP and Solana also saw notable inflows. XRP attracted $21 million, while Solana received $11 million in investments. Meanwhile, blockchain-related equities saw $33 million in inflows, bringing the total year-to-date inflows for blockchain equities to $194 million.

Declining Assets Under Management Amid Price Drops

Despite these steady inflows, the total assets under management (AUM) in crypto ETPs fell to $163 billion, down from a peak of $181 billion in January. This decline is attributed to recent price corrections across the cryptocurrency market. However, trading volumes remained stable at $20 billion for the week, indicating continued investor engagement despite the pullback in asset values.

Macro Factors Impacting Crypto Markets

The broader market sentiment, particularly in the U.S., remains influenced by macroeconomic factors such as trade tensions between the U.S. and China. According to Butterfill, the prospect of a full-scale trade conflict remains a significant concern for markets. He noted, “Bitcoin, which trades 24/7, has already reflected these fears over the weekend, and equities have followed suit.” As these global uncertainties unfold, the crypto market remains highly sensitive to shifts in investor sentiment, leading to fluctuating inflows and market activity.

Conclusion

Bitcoin and Ethereum continue to capture the lion's share of crypto investment product inflows, with Bitcoin ETPs now making up a notable 7.1% of cryptocurrency's market capitalization. While the market is navigating through price declines and global economic uncertainties, investor interest in digital assets remains strong. As the year progresses, the direction of global trade tensions and other macroeconomic factors will likely continue to play a significant role in shaping the cryptocurrency market's performance.