The approval of spot Bitcoin exchange-traded funds (ETFs) in the U.S. has led to a significant shift in the market, with European Bitcoin exchange-traded product (ETP) outflows increasing.
According to CoinShares Research Associate Luke Nolan, U.S. institutional traders are likely redirecting their investment strategies towards the newly approved spot Bitcoin ETFs.
During ETF approval week, significant inflows of $1.18 billion were recorded, although not surpassing the record set by futures-based Bitcoin ETFs. Notably, ETP trading volumes reached a record high of $17.5 billion.
The U.S. witnessed $1.26 billion in inflows, while Switzerland saw $21.4 million, Sweden saw $16 million outflows, Germany faced $27 million outflows, and Canada experienced $44 million outflows.
Before these approvals, U.S. institutions used European ETPs for relatively risk-free basis trades. However, with the introduction of U.S. spot Bitcoin ETFs, these institutions find it more cost-effective and convenient to execute similar trades domestically.
BitMEX Research notes substantial outflows from top European Bitcoin ETPs post-US ETF launch, with a similar trend observed in Canadian Bitcoin ETPs. WisdomTree responds with a fee reduction for its Physical Bitcoin ETP, becoming Europe’s lowest-cost option without crypto lending exposure.
The approval of US spot Bitcoin ETFs catalyzes a strategic market shift, drawing institutional traders away from European Bitcoin ETPs, and ultimately reshaping the crypto investment landscape.
Also Read: Grayscale CEO: Only 2-3 Bitcoin ETFs Are Likely to Succeed
