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Institutional Investors Fuel $1.7B Bitcoin Inflow Amid ETF Hopes

Why Institutional Investors Continue to Love Bitcoin

The institutional enthusiasm for Bitcoin continues. According to the latest report from crypto asset management company CoinShares, institutional funds worth $20 million flowed into Bitcoin just in the last week alone. This brings the total inflow since the beginning of the year to $1.7 billion.

Bitcoin in Focus

Bitcoin, the king of cryptocurrencies, is benefiting from the euphoria around the possible approval of about a dozen spot exchange traded fund (ETF) applications. Investors are hoping that these approvals will pave the way for mainstream use of the digital asset and provide traditional financial market actors with convenient access to the crypto market.

In fact, Bitcoin has led the current bull run and has risen by 60% since mid-October. In doing so, the cryptocurrency has reclaimed important marks last reached before the start of the bear market in May 2022.

Interest in Bitcoin Futures Increases

Interestingly, not only bullish traders invested in Bitcoin when the price rose. Short positions in Bitcoin saw an inflow of $8.6 million in the last week, suggesting that some investors saw downside potential.

The open interest (OI) in Bitcoin futures on the global derivatives exchange CME rose to a two-year high of $5.28 billion, as data from Coinglass shows. Since the start of the bull run, the OI has more than doubled.

Whales Increase Their Bitcoin Hunger

Whale investors, who are considered proxies for influential investors holding large amounts of cryptocurrencies, have increased their Bitcoin exposure. The number of entities holding at least 1,000 coins has increased in the second half of 2022, as an analysis of Santiment data shows. This is further evidence that Bitcoin is recording net purchases on the institutional side.

In total, the digital asset market recorded inflows of $43 million for the 11th week in a row. The positive sentiment associated with spot ETFs also had an impact on Ethereum [ETH] and the broader altcoin market.