Bitcoin and Ethereum, the two largest cryptocurrencies by market capitalization, have seen significant inflows from institutional investors in recent weeks. According to a report by CoinShares, crypto investment products took in nearly $2 billion in inflows last week, extending a five-week run to over $4.3 billion.
Bitcoin led the investment activity with over $1.97 billion in inflows, while Ether (ETH) saw its best week of inflows since March at nearly $70 million. The buying activity for spot Bitcoin exchange-traded funds (ETFs) in the U.S. has picked up since mid-May, with BlackRock's IBIT becoming the largest Bitcoin ETF last week, amassing over $20 billion worth of the asset since its January issuance.
The inflows into Ether products are likely in reaction to the surprise decision by the U.S. Securities and Exchange Commission (SEC) to allow spot Ether ETFs. In May, the SEC approved key regulatory filings tied to ETH ETFs, a historic milestone for the second-largest cryptocurrency.
Some traders expect the inflows into ETH products to continue in the coming months, with a rally expected toward the end of the year. Ed Hindi, Chief Investment Officer at Tyr Capital, believes that "$5–10 billion of fresh capital could be channeled through ether products in the short to medium term, which could fuel an end-of-year rally in ETH and its ecosystem to new record highs."Hindi also suggests that a price target of $10,000 for Ether in 2024 is now a reasonable target, especially when considering other supportive factors like ETH now being deflationary.
The increased institutional interest in Bitcoin and Ethereum is a positive sign for the crypto market, as it indicates growing mainstream adoption and legitimacy. The approval of spot ETFs for both assets is a significant milestone, as it provides investors with a regulated and secure way to gain exposure to these cryptocurrencies.
However, it's important to note that the crypto market remains highly volatile, and investors should always do their own research and invest cautiously. The recent price drop in Bitcoin, which saw the asset dip below $69,000, resulted in nearly $200 million in liquidations. Despite this, some analysts believe that the inflows into Bitcoin ETFs are cushioning the downside and that the current price drop is better than it may seem.
In conclusion, the latest crypto news highlights the growing institutional interest in Bitcoin and Ethereum, with both assets seeing significant inflows in recent weeks. The approval of spot ETFs for both cryptocurrencies is a significant milestone, and some traders expect the inflows to continue in the coming months, potentially fueling a rally in Ether toward the end of the year. However, investors should always exercise caution when investing in the highly volatile crypto market.
