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  • Bitcoin spot ETFs recently saw their second-highest inflow day with $887 million, indicating strong investor demand as the asset approaches its all-time high.
  • Speculation around Ethereum’s forthcoming spot ETFs suggests significant potential inflows, with predictions of up to $4.1 billion, possibly driving the next phase of the bull run.

Each day, Coinrule provides an in-depth look at the digital assets market for Blockbeat, your trusted source for news, analysis, opinion, and commentary on blockchain and digital assets. Recent trends in the market have shown an intriguing shift in investor behavior, especially in the realm of Bitcoin spot Exchange Traded Funds (ETFs).

Since the approval of the Ethereum US spot ETF 19b-4 filings, Bitcoin has experienced a period of relative stability. Volatility last week dipped below 1%, the lowest since February, as reported by K33 Research. However, the stability in Bitcoin’s price does not seem to have deterred investor interest. On Tuesday, Bitcoin’s ETF inflows reached a staggering $887 million, marking the second-highest inflow day on record. This continues a remarkable trend of sixteen consecutive days of inflows.

Bitcoin ETFs: A Surge in Demand

This surge in inflows highlights the sustained demand for Bitcoin as it nears its all-time high. Tuesday’s inflows, while shy of the March 12 record of $1.045 billion, signify robust investor confidence. BlackRock’s IBIT fund has outpaced Grayscale, now holding over 291,000 Bitcoin and crossing the $20 billion mark for the first time since its inception. According to Bloomberg ETF analyst Eric Balchunas, Bitcoin ETFs have attracted $3.3 billion in the past four weeks, ranking third among all ETFs, behind only Vanguard’s “VOO” and State Street’s “SPY” S&P 500 indexes.

The performance of Bitcoin ETFs has spurred speculation about the potential inflows for Ethereum’s forthcoming spot ETFs. Historically, Ethereum’s market performance has lagged behind Bitcoin. Despite a 20% rise on May 20, Ethereum has not matched Bitcoin’s growth, which has surged 360% since its November 2022 low. This has left the Ethereum to Bitcoin price ratio stagnant, without a new high in 30 months.

K33 Research predicts that Ethereum’s ETFs could absorb over 1 million Ethereum within the first five months post-launch, driven by its global market share in Exchange Traded Products and CME futures open interest. This translates to an estimated inflow of $3.4 billion to $4.1 billion, representing up to 0.9% of Ethereum’s circulating supply.

Future Prospects for Bitcoin and Ethereum

Bitcoin faces potential selling pressure from the imminent redistribution of 141,000 Bitcoin from the Mt. Gox bankruptcy, estimated to be worth $10 billion. However, not all of these funds are expected to be sold immediately. K33 Research suggests that only around 30% of these Bitcoins might hit the market, approximately $3 billion.

Both Bitcoin and Ethereum could benefit from the upcoming FTX estate’s cash redistribution, amounting to $16.3 billion. The extent to which this capital re-enters the market could significantly influence the next phase of the bull run for both assets.

The digital assets market is poised for exciting developments as investor interest in Bitcoin and Ethereum ETFs continues to grow. The inflows into Bitcoin ETFs demonstrate strong market confidence, and the anticipated launch of Ethereum ETFs could further amplify this trend, setting the stage for significant market movements in the coming months.