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The cryptocurrency market has seen a surge in interest following the introduction of spot Bitcoin ETF products, which continue to attract investors and dominate the headlines. These ETF products have managed to outperform many traditional investment instruments. An analyst pointed out that the launch of spot Bitcoin ETF products in the US has led to an increase in outflows from Bitcoin-based products traded in Europe.
Prominent Figure Highlights Notable Comments
Luke Nolan, a Research Officer at CoinShares, highlighted a trend where US institutional investors are redirecting their investment strategies towards recently approved spot Bitcoin ETF products. Nolan stated:
“There has been a significant outflow from European Bitcoin ETF products. Before the approval of multiple spot Bitcoin ETF products, many US institutions preferred European ETP products for nearly risk-free basis trades. However, with the recent approval of new US products, these institutions may find it more cost-effective or suitable to conduct the same basis trades domestically.”
According to Nolan, these basis trades offer a relatively risk-free investment opportunity for US institutional investors. Continuing his remarks, Nolan added:
“US investors were shorting Bitcoin futures but also buying the underlying asset through European ETP products to close the contract, profiting from the basis difference, which is the premium of the futures price over the underlying asset price. However, now they can do the same thing more conveniently at home with spot Bitcoin ETF products.”
In the context of futures trading, the basis represents the difference between an asset’s cash or spot price and the futures price for a specific contract.
Continued Interest in New ETF Products
Data from the analytics platform BitMEX Research indicates that Europe’s four largest Bitcoin ETP products have experienced significant outflows since the launch of spot Bitcoin ETF products last week. BitMEX Research analysts shared the following through X:
“Data for Europe shows people moving away from higher-fee Bitcoin ETP products.”
In Canada, which took an early step in the spot Bitcoin ETF space, there has been a notable increase in outflows from Bitcoin ETP products. Nolan commented on this:
“Regarding Canadian-based Bitcoin ETP products, it appears that US investors who had ways to invest in Canadian ETP products are now transitioning to invest in the new US funds.”
