Canadian Bitcoin ETF sees its third-biggest daily inflow ever
Canada-based Purpose Bitcoin ETF attracted over $38 million worth of Bitcoin (BTC) this Tuesday, its third-largest daily inflow to date.
According to data provided by Glassnode, investors poured about 1,054 BTC into the fund, marginally lower than the inflows recorded on Dec. 6 last year. However, the capital injection still came out to be almost half the amount that entered the Purpose Bitcoin ETF on its debut on Feb. 22, 2021 — over 2,250 BTC.
Bitcoin ETFs mimic the cryptocurrency's spot price performance, thus allowing investors to gain exposure in its market without holding the actual BTC directly. In simple terms, ETF-backers buy real Bitcoin with the money they attract from an investor, thus becoming a proxy method to measure markets' interest in the cryptocurrency.
Typically, markets believe that strong inflows into funds drive up the underlying assets' prices by attracting more return-chasing investors. As a result, the Bitcoin price should move in the same direction as the fund flows — to the upside — in a perfect world.
The higher inflows surfaced despite Bitcoin's recent price correction, wherein BTC price has been trading around $37,000 on Feb. 3, almost three months after hitting a record high of $69,000.
But in the same period, the total amount of BTC held in the Purpose Bitcoin ETF reserves has climbed from nearly 24,100 to a little over 31,000. That suggests that Purpose ETF investors have been buying the Bitcoin dip.
Means people bought the etf so they had to buy more coins.
But the story appears different when one takes all the Bitcoin funds into consideration.
According to a report published on Jan. 31 by CoinShares, the Bitcoin funds experienced a weekly inflow of $22 million worth of BTC as of Jan. 28.
Read more on cointelegraph.com
