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Institutional Bitcoin Inflows Surpass $1 Billion in 2023

Both Institutional Bitcoin and alternative cryptocurrencies (altcoins) have seen substantial capital inflows this year, with a potential scarcity of Bitcoin still a topic of discussion, particularly as the approvals of ETFs and the halving event loom ahead.

Institutional Bitcoin coins stacked on one another

Investment products related to digital assets received inflows of $293 million last week, marking the seventh consecutive week of positive flows.

According to CoinShares’ data, these consecutive positive flows have contributed to year-to-date inflows into cryptocurrency exchange-traded products totaling $1.14 billion.

Institutional interest has fueled these inflows, propelling yearly inflows to the third-highest level. Additionally, the total assets under management in cryptocurrencies surged by 9.6% in the past week.

The weekly flows report revealed that total assets under management reached $44.3 billion, marking a 99% increase this year and reaching the highest level since May 2022.

Read the weekly report here.

Specifically, Bitcoin witnessed inflows of $240 million last week, contributing to a year-to-date total of $1.08 billion. Bitcoin’s Exchange-Traded Products (ETPs) trading volume represented almost 20% of the total volume on reputable exchanges.

James Butterfill, CoinShares’ Head of Research, highlighted the rarity of increased ETP volume compared to BTC trading volume, suggesting heightened participation of ETP investors in the current rally compared to trends observed in 2020/21.

Notable inflows were observed in Ethereum investment products, with a $49 million influx last week, marking the highest for Ether since August 2022. The improved sentiment around Ether-based ETPs coincides with increased interest in spot Ethereum ETF filings.

Solana, a standout performer in recent weeks, experienced significant inflows in the past week, with investors allocating $12 million to SOL products, contributing to its leading position in the segment with $121 million in year-to-date inflows.

This positive trend reflects in SOL’s price, which despite experiencing a sharp decline in November 2022 amid the FTX collapse, is currently trading at $59, marking a remarkable 170% increase over the last 30 days and an impressive 315% increase over the past year.

Turning back to Bitcoin, the renewed interest prompted on-chain analytics company Glassnode to reassess Bitcoin supply dynamics.

As the next block subsidy halving approaches in five months, the amount of BTC being held for safekeeping now exceeds the mined quantity by 2.4 times, highlighted in their latest edition of the weekly newsletter, “The Week On-Chain.”

The newsletter stated, “The fourth halving event is fast approaching and represents an important fundamental, technical, and philosophical milestone for Bitcoin. For investors, it is also an area of intrigue given the impressive return profile in prior cycles.”

Among several accompanying charts, one illustrated the storage of BTC by long-term holders (LTHs) — entities holding coins for 155 days or more.

Bitcoin Long-term Holder Supply Storage vs Issuance graph

Philip Swift, the creator of the statistics platform Look Into Bitcoin, highlighted the growing number of wallet entities, encompassing both large and small holders.

Describing the phenomenon, he remarked to X subscribers on that day, “This is what adoption looks like.”

Bitcoin Addresses Holding Chart

Exciting times await in the coming six months.

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