As a seasoned researcher with over a decade of experience analyzing financial markets, I find myself intrigued by the latest developments in the U.S. crypto ETF landscape. The continued inflows into Ethereum ETFs contrasting the outflows from Bitcoin ones is an interesting dynamic that I’ve not encountered before in my career.
As a crypto investor, I’ve noticed an interesting trend this week: Ethereum exchange-traded funds (ETFs) in the U.S. have been attracting investors for three days straight, whereas Bitcoin ETFs have experienced significant outflows. This shift comes after two consecutive days of gains for Bitcoin ETFs.
On August 14th, data provided by SoSoValue shows that a total of nine Ethereum-based Exchange Traded Funds (ETFs) collectively garnered approximately $10.8 million in investments. This follows a trend of growth as the previous day’s inflows amounted to $24.3 million and $4.9 million, respectively.
BlackRock’s ETHA was the largest contributor to the influx with approximately $16.13 million, followed by Fidelity’s FETH at around $6.65 million and Bitwise’s ETHW with about $2.67 million in new investments. The Grayscale Ethereum Mini Trust, which holds the second-largest assets among spot Ethereum ETFs, saw moderate inflows of around $2.26 million, indicating a reversal after two consecutive days without any activity.
As a crypto investor, I’ve noticed that Grayscale’s ETHE has been experiencing consistent withdrawals, with a recent loss of $16.95 million. Since its launch, it has accumulated total outflows amounting to a staggering $2.34 billion. On the other hand, the other four Ethereum ETFs seem to be relatively quiet in terms of significant activity.
Although there were inflows, the trading volume for Ethereum ETFs fell to $155.91 million on this day, which is less than what was traded the previous day. To date, these funds have recorded a total net outflow of $365.89 million.
Bitcoin ETFs see substantial outflows
On that particular day, however, all 12 U.S.-based Bitcoin ETFs collectively saw a withdrawal of approximately $81.36 million, reversing their brief period of positive inflow as indicated by data from SoSoValue. Notably, BlackRock’s IBIT and Franklin’s EZBC bucked this trend, actually receiving investments of $2.68 million and $3.42 million respectively. This was a significant milestone for EZBC as it signified the first instance of net inflows since July 22.
Yesterday witnessed substantial withdrawals from various Bitcoin ETFs, with Grayscale’s GBTC experiencing the largest at approximately $56.87 million. Other significant withdrawals included Fidelity’s FBTC ($18.05 million), Ark Investments’ ARKB ($6.77 million), and 21Shares’ ARKB ($5.78 million). Meanwhile, Bitwise’s BITB also saw outflows of an undisclosed amount. The remaining six Bitcoin ETFs experienced no changes in their inflows or outflows for the day.
Currently as I write, Bitcoin (BTC) has dipped by 4.2%, currently priced at approximately $58,167. Ethereum (ETH), too, has seen a drop of around 4%, placing its value at $2614. Data from crypto.news indicates this trend across the cryptocurrency market, where an overall decrease of 3.8% was recorded, bringing the total market capitalization to about $2.06 trillion.
Inflation cooling may boost crypto long-term
According to comments made by Eliézer Ndinga, vice president at 21Shares, he examined the current market trends. He pointed out that the most recent inflation data suggests a stabilized yet cooling economy, which is significant for the cryptocurrency industry, particularly in light of last week’s market decline.
Ndinga indicated that since inflation is in line with predictions, there’s a higher chance of a modest 0.25 percentage point reduction in interest rates by the Federal Reserve. This could boost riskier investments. Nevertheless, he pointed out that initially, Bitcoin and Ethereum showed signs of falling, possibly because traders were anticipating a larger cut of 0.5 percentage points or more.
Despite equities holding steady, Ndinga maintains a positive outlook on the long-term advantages for the crypto sector. If inflation continues to rise temporarily, it may prompt additional interest rate decreases this year, which could result in increased market liquidity. In such a scenario, investors might be enticed to invest in higher-risk assets like Bitcoin and Ethereum due to the extra liquidity.
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2024-08-15 12:54