Spot Bitcoin ETFs Face $43 Million In Outflows After Two Days Of Inflows

by

As a seasoned researcher with years of experience tracking the crypto market, I must say that yesterday’s outflows from Bitcoin and Ethereum ETFs were indeed intriguing. The rollercoaster ride we’ve witnessed since their launch in early 2024 has been a testament to the volatile yet promising nature of this space.

On September 11, 2024, US Bitcoin exchange-traded funds experienced a total withdrawal of approximately $43 million, after enjoying inflows for the past two days, as confirmed by data from SoSoValue.

Ark Invest and Grayscale Lead Bitcoin ETF Outflows

Based on information from SoSoValue, a crypto ETF data provider, it appears that the largest outflows from US spot Bitcoin ETFs occurred yesterday. The Ark Invest and 21Shares’ ARKB funds led this trend, with a total net outflow of approximately $54 million. In second place was Grayscale’s GBTC spot Bitcoin ETF, which had a net outflow of about $4.6 million. Additionally, Grayscale’s Bitcoin Mini Trust also saw a small net outflow of around $511,000.

Today, I saw significant positive flows into my crypto portfolio, primarily driven by Fidelity’s FBTC, which raked in approximately $12.6 million. This was closely followed by Invesco’s BTCO, which recorded around $2.59 million in net inflows.

On the same day, Ethereum (ETH) Exchange-Traded Funds experienced a total of $542,000 in withdrawals. Despite Fidelity’s FETH recording $1.17 million in net deposits, this was offset by $1.71 million in outflows from VanEck’s ETHV product. In simpler terms, while some investors were putting money into Fidelity’s FETH, more were taking their investments out of VanEck’s ETHV product, resulting in a net loss for Ethereum (ETH) ETFs overall on that day.

Since they started in January 2024, Bitcoin ETFs followed by SoSoValue have collectively gathered about $17 billion through inflows. On the flip side, Ethereum ETFs have seen a total outflow of around $563 million.

The significant gap in the success of Bitcoin and Ethereum ETFs might be due to less excitement or investment from the cryptocurrency community and institutional investors regarding Ethereum ETFs compared to Bitcoin ETFs at their respective launches.

What Could ETF Outflow Suggest About Investor Confidence?

Investors withdrawing funds from Bitcoin and Ethereum Exchange-Traded Funds might be adopting a cautious approach due to potential market fluctuations caused by significant economic events on the horizon, like the upcoming decision by the U.S. Federal Reserve regarding interest rates or the U.S. Presidential Elections in November 2024, which could stir up volatility in the crypto sector.

Considering the recent shift from net inflows to net outflows in the digital asset ETFs happened two days after, it’s plausible that the unexpectedly high US core CPI reading on yesterday might have influenced investors to withdraw funds from these ETFs.

It’s conceivable that experienced investors may be withdrawing their funds in preparation for better opportunities to re-invest in Bitcoin (BTC) and Ethereum (ETH), indicating a potential short-term dip in their prices. Consequently, these outflows could be due to strategic profit-taking by investors rather than a decline in their faith in the digital asset market as a whole.

It appears that the interest in digital assets among institutions continues to grow, with BlackRock, a global leader in asset management, now holding the most significant amount of cryptocurrency ETFs. This surpasses Grayscale’s previous position.

Additionally, a study conducted by digital currency exchange Gemini revealed that investment products tied to Bitcoin and Ethereum (Bitcoin and Ethereum Exchange-Traded Funds) have attracted billions in investments from institutional backers. Yet, the ambiguous regulatory landscape surrounding cryptocurrencies continues to be a significant worry.

As we speak, Bitcoin is being bought and sold for approximately $57,656, marking a 1.3% increase over the past day. Its total market value stands at an impressive $1.14 trillion. Ethereum, on the other hand, is trading at $2,343, showing a modest 0.2% rise in the last 24 hours. The combined market cap of Ethereum amounts to $281.7 billion. Collectively, the cryptocurrency market has a total value of $2.12 trillion, experiencing a minor increase of 0.3% over the same period, as per CoinGecko data.

Spot Bitcoin ETFs Face $43 Million In Outflows After Two Days Of Inflows

Read More

2024-09-13 11:12