European Investors Favor Bitcoin Following ETF Launch, Spectrum Data Shows

Over the last few months, investor sentiment towards individual cryptocurrencies has favored Ethereum (ETH) over Bitcoin (BTC). However, the release of the first-ever spot exchange-traded funds (ETFs) for BTC has changed the balance of market forces, and now there is a much more bullish positioning towards the oldest cryptocurrency. This is especially true as its price has reached the highest levels in two years, exceeding $50,000.

Europeans Show Greater Interest in BTC over ETH

Spectrum Markets, a pan-European trading venue, released data showing diverging sentiment among retail investors regarding BTC and ETH cryptocurrencies in January 2024.

The company's Spectrum European Retail Investor Index (SERIX) for BTC rose to 109 points, indicating bullish sentiment, while the index for ETH dropped from 120 points to 103 over the same period. The SERIX scale designates numbers above 100 as bullish and numbers below as bearish.

This shift coincided with the US Securities and Exchange Commission (SEC) approving several BTC ETFs on January 11. The regulatory move opened BTC investments to a wider range of investors. No similar approval has occurred yet for ETH products.

Michael Hall, the Head of Distribution at Spectrum Markets, commented that the SEC approval addresses demand for "enhanced regulatory standards" around cryptocurrencies.

“Meanwhile, in the EU, a bitcoin ETF is still not possible under existing regulation as UCITS regulations do not allow a single reference price for an ETF underlying,” Hall added. "To stay competitive with the US, EU rules must be adjusted in order to prevent the diversion of flows, executed in Europe, abroad.”

Spectrum Markets began offering derivatives linked to both cryptocurrencies in May 2022, allowing traders to gain exposure without needing separate crypto wallets. The company said it saw an increase of 2.5 times in BTC trading volume in January 2024 compared to monthly averages for 2023.

Spectrum Reports Volume for January 2024

In January 2024, Spectrum's total order turnover reached €311.5 million, with 32.1% of trades taking place outside of traditional hours. The top three underlying assets traded were Germany's DAX 40 index, the US Nasdaq 100, and the Dow Jones Industrial Average.

“Looking at the SERIX data for the top three underlying markets, the DAX 40 sentiment increased slightly from 97 to 99,” the company commented. “Similarly, the NASDAQ 100 and DOW 30 both remained bearish at 98, from 98 and 96 respectively in the previous month.”

Amid challenging market conditions, the pan-European platform for securities trading, has set a new record for trading volume in 2023. The company revealed in its most recent report that its total order book turnover increased 9% to €3.62 billion over the last year.

The volume of traded securities in 2023 surged 14%, reaching 1.62 billion securities, a significant rise from 1.42 billion in the prior year. This activity spanned nearly 2.5 million transactions, with 33.9% of these trades executed outside conventional trading hours. This supports the previous year's finding that approximately one-third of all trades are conducted after normal trading hours.