Investors pile $1bn into crypto exchange-traded products amid ETF euphoria

Investors pile $1bn into crypto exchange-traded products amid ETF euphoria

Optimism for approval of a spot Bitcoin ETF, including one from Larry Fink's BlackRock, has helped inflows for crypto investment products.

Digital asset investment products lured some $293 million last week, sending inflows surging past the $1 billion mark this year, CoinShares found.

And real world assets are the buzzword again as MakerDAO eyes opportunities in credit market.

Let’s get into it

Euphoria surrounding potential approval of a Bitcoin spot exchange traded fund in the US has seen inflows for digital asset investment products surge past the $250 million mark for the third straight week.

Ethereum has been a recent beneficiary.

Ethereum saw its largest inflows since August 2022 of $49 million, “with the last two weeks signifying a real turnaround in sentiment,” CoinShares said in a report.

At some $44 billion, total assets under management in crypto is now the highest since a raft of fund collapses in May 2022, the firm said.

Tokenisation boom

Meanwhile, MakerDAO may soon be eager to start tokenising private credit and collateralised loan obligations.

That’s a potentially massive opportunity. The private credit market is worth $1.5 trillion.

Allan Pedersen, CEO of asset manager Monetalis Group told DL News that the protocol could chase double-digit yields in those markets.

Monetalis manages Maker’s liquid bond strategy, and its vault is worth around $1.2 billion.

Maker has experience tokenising real-world assets.

There’s a wave of optimism about broad-based tokenisation — tracking and trading digital representations of assets on blockchains — of assets like US government bonds.

Banks see tokenisation as a shortcut to automating complicated trading processes.

And in the current interest rate environment, investment firms like Franklin Templeton see high demand for US Treasuries, which are offering risk-free 5% yields.

At the same time, regulators are helping.

The European Union, for instance, has a sandbox where banks, asset managers, and others can experiment with tokenisation without falling foul of regulation.

Pedersen predicted that real-world asset investment will move fully on-chain as soon as the next six months.

Private credit and CLOs won’t be as quick — it will be at least another year before those assets are fully tokenised, he said.

Crypto market movers

  • Bitcoin is down 1.2% in the last 24 hours, reaching $36,736.
  • Ethereum rose by 1.8% in the same period, at $2,089.

What we’re reading

Comments, queries, feedback?


Get key insights and expert analysis in our weekly newsletters

The RoundupThe DecentralisedThe Guidance
Choose your topics
The Roundup
The Roundup
A recap of the week's top stories
The Decentralised
The Decentralised
Your weekly guide to the world of DeFi
The Guidance
The Guidance
Your weekly guide to global regulation in crypto and DeFi