Cash is flowing out of high-profile crypto funds following the launch of bitcoin exchange-traded funds (ETFs) earlier this month, according to a new report.
Digital asset fund manager CoinShares said last week that investors had withdrawn $21 million from crypto fund issuers.
According to the report, $2.9 billion has been withdrawn from top funds such as Greyscale, CoinShares and 21Shares since the much-anticipated January 11 trading start of the Bitcoin ETF.
Short bitcoin products — bets on the crypto's price — are accepted in cash, CoinShares said. Other altcoins lost a total of $22.5 million to investors with exposure to Ethereum and Solana, he added.
Instead, CoinShares, investors seeking exposure to digital assets are putting their money into the new Bitcoin ETFs.
“Currently, high-spenders are struggling to see $2.9 billion in outflows in the U.S., while newly issued ETFs have seen inflows totaling $4.13 billion since launch.” says the report.
On January 10, the US Securities and Exchange Commission approved Bitcoin ETFs, a decade after it blocked applications for the product.
A Bitcoin ETF gives investors exposure to the largest cryptocurrency by allowing people to buy shares that track the value of the asset.
High-profile Wall Street firms like BlackRock and VanEyck have applied to launch their own crypto investment vehicles and were given the green light this month — essentially bringing Bitcoin to mainstream investors.
Among the 10 ETFs traded, BlackRock's iShares Bitcoin Trust is the best performer, according to CoinShares data. The fund now has $1.3 billion in assets under management.
Meanwhile, crypto fund manager Greyscale dominates the flow. Greyscale's Bitcoin Trust (GBTC) recently turned into a Bitcoin ETF and investors are quickly cashing out.
Previously, the Trust operated as a closed-end fund where investors could not redeem their shares during a 6-month lock-up period. Since the conversion to ETFs, investors have withdrawn more than $2.2 billion, CoinShares said.
Edited by Stacy Elliott.
Stay on top of crypto news, get daily updates in your inbox.
