Crypto markets have seen $12 billion in net inflows this year
Most of the $16 billion flowed into spot bitcoin ETFs since their launch likely came from existing digital wallets on exchanges.
Digital assets have seen $12 billion of net inflows so far this year, and if flows continue at the same pace, the figure could grow to $26 billion by the end of the year, JPMorgan (JPM) said in an investigative report on Wednesday.
The #BTC Spot ETFs have led the way, attracting $16 billion in net inflows, according to the report. This figure, when combined with Chicago Mercantile Exchange (CME) futures flows plus capital raised by crypto venture capital funds, brings the total inflow into digital asset markets this year to $25 billion. .
Still, not all of these inflows are new money entering the crypto space. “We believe there has likely been a significant rotation away from digital wallets on exchanges toward new spot bitcoin ETFs,” wrote analysts led by Nikolaos Panigirtzoglou.
This rotation is evidenced by the drop in bitcoin reserves across all exchanges since the spot ETFs were launched in January, estimated at 0.22 million bitcoins or $13 billion, the bank said.
"This implies that most of the $16 billion inflow into spot bitcoin ETFs since their launch likely reflects a rotation from existing digital wallets onto exchanges," the authors wrote.
This net inflow of $12 billion is higher than last year, but markedly lower than the 2021/2022 bull period.
Given how high the price of bitcoin is relative to the cost of production for miners or the cost of gold, JPMorgan said it is skeptical that capital inflows will continue at the same pace for the rest of the year.