Bitcoin ETF welcomes a surge in applications, but demand for cryptocurrency assets cools sharply

According to Bloomberg citing CoinShares data, digital asset products from companies such as Grayscale, Bitwise, and 21Shares have faced outflows for the fifth consecutive week, the longest period since January 2018. The total outflow of these funds was about US$93 million, and according to digital asset managers, most of the outflows came from Bitcoin products.
As of press time, the price of Bitcoin is $45,943, up about 53% since it fell below $30,000 in June.

Since Bitcoin prices bottomed out in June, funds have been flowing out. The SEC has received at least 18 cryptocurrency ETF applications this year, and the number of applications is still increasing. However, investor demand for these digital assets is gradually cooling.
According to Bloomberg data, Bitcoin funds and futures are facing outflows for the third consecutive month, the longest period since 2014. The main reason for the outflow is that the open interest in Bitcoin futures is gradually decreasing, which means that investors are leaving the market one after another.
U.S. Securities and Exchange Commission Chairman Gary Gensler said this month that regulators might be more open to setting up a bitcoin ETF if it was based on futures rather than the cryptocurrency itself.
Even if the SEC eventually approves a bitcoin ETF, it’s not certain there will be huge investor demand for it, said Meltem Demirors, chief strategy officer at Coinshares.
“The cryptocurrency market in the U.S. is already quite mature, and people can trade Bitcoin in many places, and we are not sure what the market demand for a Bitcoin ETF will be,” she said.
These cryptocurrency outflows could have been even larger if not for the fact that Grayscale Bitcoin Trust (ticker: GBTC), a cryptocurrency fund that manages $30 billion, is not allowing redemptions of shares.
After reaching an all-time high of nearly $65,000 in April, Bitcoin's price has been subject to wild fluctuations. Environmental and regulatory concerns have dampened market sentiment, and Bitcoin fell below $30,000 in June. The U.S. Senate recently passed an infrastructure bill that includes broad oversight of virtual currencies.