Crypto Inflows Mask Institutional Demand Complexity
Crypto investment products have seen inflows of about $4.1 billion in September, according to CoinShares, but it's difficult to determine how much of that demand comes from institutions.
BlackRock's iShares Bitcoin Trust ETF (IBIT) accounted for more than 53% of those inflows, said James Butterfill, head of research at CoinShares. He noted that while institutional investors may be returning to crypto, it's hard to separate their money from retail investments in the ETF world.
ETF buying can reflect arbitrage strategies as well as bets on rising Bitcoin prices, making inflows an imperfect measure of bullish conviction. Butterfill also sees investors looking beyond tokens to businesses that profit from crypto adoption.
The rotation within digital assets deserves more attention, said Butterfill, pointing to early-September CoinShares data that showed more than $100 million flowing into blockchain equities over the preceding month.