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Bitcoin ETP (exchange-traded product) outflows in Europe have increased in recent months following the launch of spot Bitcoin. One analyst said the cause was the US ETFs.
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CoinShares research analyst Luke Nolan said the weekend change highlighted a trend of institutional investors in the US shifting their investment strategies to the recently approved spot bitcoin ETFs.
In a statement, Nolan said: “There has been a significant outflow from European Bitcoin ETPs. Prior to the approval of multiple spot Bitcoin ETFs, many US institutions were using European ETPs for transactions at almost risk-free basis. However, with the recent approval of the new US products, these institutions may find it more cost-effective or convenient to execute the same underlying transactions domestically.”
Nolan added that while futures prices have been preserved, they can now do the same thing more efficiently with domestic spot bitcoin ETFs.
“US investors were taking long positions on bitcoin futures, but were also buying the underlying asset through European ETPs, which allowed them to close the contract and profit from the basis spread; in this case, it’s the premium over the underlying asset price.”
In the context of futures, the basis represents the difference between the cash or spot price of an asset and the futures price of a particular contract.
Notably, there has also been a significant increase in outflows from Canadian Bitcoin ETPs.
“With regard to Canadian bitcoin ETPs, it seems that US investors who have ways to invest in Canadian ETPs are also moving to invest in the new US funds,” Nolan added.