Institutional investors have been closely monitoring the cryptocurrency market in recent weeks, with Bitcoin remaining the primary focus of their attention. CoinShares, a leading digital asset investment firm, reported significant inflows into Bitcoin-related products, accounting for 98% of all digital asset flows, according to Cointelegraph early this week. This renewed interest in Bitcoin comes after nine consecutive weeks of outflows, indicating a change in sentiment among institutional investors. Additionally, Ether, the native token of the Ethereum blockchain, has witnessed a surge in trader activity, as investors place substantial bets on its performance in the second half of 2023.
Over the last two weeks, Bitcoin-related products saw inflows totalling $310.6 million, according to CoinShares. This represents a substantial shift in investor sentiment, with Bitcoin reclaiming its position as the primary investment choice in the cryptocurrency market. The surge in Bitcoin’s price and dominance has been attributed to recent developments, including BlackRock’s spot Bitcoin ETF application and similar filings from prominent financial institutions like Fidelity, Invesco, Wisdom Tree, and Valkyrie. Since these events, Bitcoin’s price has risen by 25.2%, reaching $31,131 at the time of writing. Bitcoin’s dominance, measuring its market cap relative to the total market cap of all cryptocurrencies, has also risen to 51.46%.
While Bitcoin garners significant attention, Ethereum has also seen positive developments. In the second week of inflows, Ethereum investment products received $2.7 million, reversing a trend of outflows that persisted for some time. This renewed interest in Ethereum aligns with the views expressed by Fireblocks CEO Michael Shaulov, who noted a growing interest from institutional investors in core assets such as Bitcoin and Ethereum which continue to be perceived as essential holdings by many investors, although less so with alternate cryptocurrencies.
He commented, “The narrative around Ethereum is pretty much the understanding that future ecosystems of tokenization are likely to be EVM-based. And if they’re EVM based, then Ethereum is going to play out as utility.”
Ether, the native token of the Ethereum blockchain, has experienced a remarkable rally, surging by 61% during the first half of 2023. Traders and investors are now placing substantial bets on Ether’s continued growth in the second half of the year. Notably, CoinDesk reports that an investor recently purchased approximately 63,250 “bull call spreads” tied to Ether, set to expire on December 29. This trade involved selling a call option at the $2,500 strike price to finance the purchase of a call option at the $1,900 strike price. The strategy cost the investor an initial $10 million, as the purchase of the $1,900 call outweighed the proceeds from selling the $2,500 call. This approach allows the call buyer to benefit from price rallies while providing the seller with an upfront premium.
The cryptocurrency market continues to capture the attention of institutional investors, with Bitcoin leading the way as the primary focus of their investments. After a period of outflows, Bitcoin-related products have seen substantial inflows, attributed to factors such as the BlackRock spot Bitcoin ETF application and filings from other major financial institutions. Meanwhile, Ethereum has witnessed a resurgence in investor interest, with inflows into Ethereum investment products reversing a prolonged outflow trend. Furthermore, Ether’s impressive performance in the first half of 2023 has sparked optimism among traders, who are placing significant bets on its growth in the second half of the year. As the crypto market evolves, institutional investors are recognising the value and potential of both these digital assets as integral components of their investment portfolios. The overall outlook thus remains positive as we head into H2 2023.
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