Earlier this month, US bitcoin (BTC) spot ETFs were approved and have been available for trading since then. But what is less known is that such bitcoin products have been traded in Europe for some time. However, since the launch of the American bitcoin ETFs, these European ETFs have seen a significant outflow of capital. Why does this happen?
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Institutions prefer American ETFs
Luke Nolan, an analyst from CoinShares Research reports that European bitcoin exchange traded products (ETPs) have been seeing significant outflows of money lately. This outflow coincides with the launch of the US bitcoin ETFs. Nolan believes institutional investors are likely to move their money into US ETFs.
“There is a significant outflow from European bitcoin ETPs. Before the approval of multiple bitcoin spot ETFs, many US institutions used European ETPs for almost risk-free basic trades. But with the recent approval of the new U.S. products, these institutions are finding it more cost-effective and convenient to execute the same basic trades domestically.”
So said Nolan in conversation with the American crypto news platform TheBlock. An exchange traded fund (ETF) is a subtype of exchange traded products (ETPs).
Significant outflow from European bitcoin ETFs
Data from BitMEX Research shows that European bitcoin ETPs are indeed experiencing capital outflows. In the first five days since the launch of the US ETFs, it amounts to a total of $106 million.
In addition to European bitcoin ETFs, there were also such spot products on the market in Canada before the launch of the American ETFs. Nolan indicates that Canadian bitcoin ETFs are also experiencing an outflow of capital.
Earlier this week it was announced that the American Nasdaq stock exchange has applied for a new type of bitcoin ETF with the Securities and Exchange Commission (SEC). To be precise, this concerns requests to offer options contracts on the recently approved bitcoin ETFs. With these financial products you can achieve extra profit because of the built-in leverage. Read all about these new ETF applications in this article.
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2024-01-21 15:54:20
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