Weekly flows break records with US$2.7bn inflow

US$1.18bn inflows last week as US ETFs begin trading — not a record though

European digital asset investment company CoinShares announced on social media that it had exercised its option to acquire US digital asset management company Valkyrie Funds LLC. The company's spot Bitcoin ETF (Valkyrie Bitcoin Fund) was approved this week.

According to the latest "Digital Asset Fund Flow Weekly Report" released by CoinShares on December 11th, digital asset investment products experienced capital inflows for the 11th consecutive week, with a total amount of 43 million US dollars. Due to recent price increases and potential downside risks, short positions have significantly increased. In terms of regional distribution, Europe leads with an inflow of 43 million US dollars, followed closely by the United States with a total inflow of 14 million US dollars (half of which is short positions), while Hong Kong and Brazil experienced outflows of 8 million and 4.6 million US dollars respectively.

According to CoinShares' weekly report data on November 27th, the net inflow of funds for digital asset investment products last week was $346 million, the largest single-week inflow amount in nearly 9 weeks. The report pointed out that the market is currently experiencing the largest round of growth since the bull market at the end of 2021, stimulated by market expectations that the US will launch spot-based ETFs. The combination of price increases and fund inflows has now pushed the total assets under management (AuM) to $45.3 billion, the highest level in a year and a half.<br>Last week, the total inflow of Bitcoin was $312 million, slightly higher than $1.5 billion from the beginning of the year to now. The proportion of ETP trading volume to Bitcoin spot total trading volume is still far higher than the average level, reaching 18% last week, highlighting the continued increase in the use of ETPs to gain exposure to this asset class. Ethereum's inflow last week was $34 million, bringing the total fund inflow for the past 4 weeks to $103 million, almost reversing the trend of outflows this year, marking a decisive shift in market sentiment. The total inflows of Solana, Polkadot, and Chainlink were $3.5 million, $800,000, and $600,000, respectively.

According to CoinShares' weekly report on November 20th, the total inflow of funds for digital asset investment products last week was $176 million, which marks the eighth consecutive week of inflows. The total inflow of funds from the beginning of the year to date has reached $1.32 billion.Last week, the inflow of funds for Bitcoin was $155 million, and various altcoins also had inflows. Solana, Ethereum, and Avalanche had inflows of $13.6 million, $3.3 million, and $1.8 million, respectively.

CoinShares, a leading European crypto ETF issuer, has obtained an exclusive option to acquire Valkyrie Funds until March 31, 2024. This move is aimed at strengthening CoinShares' presence in the US and establishing a global one-stop-shop in digital asset investments. The potential acquisition of Valkyrie Funds by CoinShares is seen as a big move by Bloomberg analyst James Seyffart, as it would bring ETF expertise to the US. Valkyrie Investments plans to incorporate CoinShares' name if the US SEC approves the Valkyrie Bitcoin Fund, which has filed for a spot Bitcoin ETF.

According to a report from CoinShares, last week saw a total outflow of $55 million from digital asset investment products. Bitcoin had an outflow of $42 million and has seen outflows for almost 17 consecutive weeks as investors short Bitcoin. Ethereum had an outflow of $9 million, while Polygon, Litecoin, and Polkadot had outflows of $900,000, $600,000, and $500,000 respectively. The panic last week led to a 10% decrease in assets under management (AuM), which ended the week at $32.3 billion. The outflows were mainly concentrated in Canada and Germany, with outflows of $36 million and $11 million respectively. Switzerland had an inflow of $3.5 million. Blockchain stocks also suffered from negative sentiment, with outflows of $6 million last week.

Several crypto-focused companies, including MicroStrategy, Coinbase, Coinshares, Block, and Robinhood, have reported record profits in Q2 2023 following a minor crypto market rally. MicroStrategy increased its BTC holding by 12,333 BTCs, bringing its total BTC holding to 152,800, and recorded a gross profit of $93.3 million. Coinbase posted total revenue of $707.9 million but remained in loss despite the crypto market rally. The positive performance in Q2 2023 has led analysts to speculate that the crypto winter may be over, but the outcome of Q3 will determine the future for many of these companies.

CoinShares, a European manager of cryptocurrency exchange-traded products (ETPs), saw a 33% increase in Q2 2023 revenue compared to the same quarter last year, reaching £20.3 million ($25.9 million). The firm's asset management fees decreased by 25% to £10.6 million ($13.52 million), but this was offset by a £10 million ($12.76 million) gain in capital markets operations. CoinShares' profits for the quarter were £5.3 million ($6.76 million), compared to a loss of £0.6 million ($0.77 million) in Q2 2022. The company also implemented a tool called "Ledger Lens" to allow investors to verify the backing of its ETPs in real-time.