Cash is flowing out of high-profile crypto funds following the launch of spot Bitcoin exchange-traded funds (ETFs) earlier this month, according to a new report.
Digital asset fund manager CoinShares said Monday that investors pulled $21 million out of crypto funds issuers last week.
And since long-awaited Bitcoin ETFs started trading on January 11, $2.9 billion has been pulled out of top funds such as Grayscale, CoinShares, and 21Shares, the report noted.
Short Bitcoin products—which bet on the price of crypto going down—received cash, CoinShares said. Other altcoin funds giving investors exposure to Ethereum and Solana lost a total of $22.5 million, it added.
Instead, CoinShares said, investors wanting exposure to digital assets are putting their money into the new Bitcoin ETFs.
“Incumbent, higher cost issuers suffered in the U.S., seeing $2.9 billion of outflows, while newly issued ETFs have now seen a total of $4.13 billion inflows since launch.” the report said.
On January 10, the U.S. Securities and Exchange Commission approved spot Bitcoin ETFs after a decade of denying applications for the product.
A spot Bitcoin ETF gives investors exposure to the biggest cryptocurrency by market cap by allowing people to buy shares that track the price of the asset.
High-profile Wall Street firms such as BlackRock and VanEck applied to launch their own crypto investment vehicle and were this month given the green light—essentially bringing Bitcoin to mainstream investors.
Of the 10 ETFs that are trading, BlackRock’s iShares Bitcoin Trust is the best-performer, CoinShares’ data showed. The fund now has $1.3 billion in assets under management.
Previously, the Trust had operated like a closed-end fund where investors could not redeem their shares during a 6-month lock up period. Since its conversion to an ETF, investors have pulled out over $2.2 billion, CoinShares said.
Edited by Stacy Elliott.