Bitcoin ETF inflows reached about $4.1 billion in September, but CoinShares says the figures don't clearly show how much of that demand is institutional. Some of the buying into BlackRock's IBIT reflects basis-trade arbitrage rather than bullish bets on price.
Billions are flowing back into Bitcoin exchange-traded funds, but the totals alone don't reveal how much of the demand comes from institutions, according to CoinShares. US crypto investment products attracted about $4.1 billion in September. BlackRock's iShares Bitcoin Trust ETF (IBIT) accounted for more than 53% of those inflows, CoinShares head of research James Butterfill told Cointelegraph.
Asked whether institutional investors were returning to crypto, Butterfill said it is very difficult to disaggregate institutional and retail money in the ETF world. Buying can reflect arbitrage strategies as well as bets on rising Bitcoin prices, so inflows alone are an imperfect measure of bullish conviction.
IBIT points to a basis trade, not just conviction
Butterfill said many institutional investors use IBIT for the Bitcoin basis trade — buying shares of a spot Bitcoin ETF while shorting Bitcoin futures to profit as the spot and futures prices converge. According to Butterfill: "At the moment the basis trade has an attractive yield at 6%", and IBIT has captured over 53% of the $4.1 billion in month-to-date inflows. He added that the figures suggest positive sentiment is broad-based across both institutional and retail investors.
More recent CoinShares data shared with Cointelegraph showed September inflows into US crypto investment products had risen to about $4.44 billion. That compared with $4.53 billion globally. Bitcoin products led with $2.84 billion, followed by Ether at around $946 million. Zcash ranked third with $284 million.
CoinShares flags a rotation into crypto-adjacent equities
Butterfill also pointed to growing investor interest in companies that make money from crypto adoption. He said the rotation within digital assets deserves more attention, citing early-September CoinShares data showing more than $100 million flowing into blockchain equities over the preceding month.
Butterfill expects investors to watch closely which businesses generate revenue from tokenization, payments and trading infrastructure as those markets expand. He pointed to estimates that stablecoin assets could approach $4 trillion by the end of the decade, and said Hyperliquid was recording up to $9 billion in daily trading volume.
Source: Cointelegraph.com News
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