Spot Bitcoin exchange-traded funds in the United States saw inflows for the first day following eight consecutive days of outflows that shed over $1.18 billion from their total assets under management, signaling a potential shift in investor sentiment.
According to data from SoSoValue, the 12 spot Bitcoin exchange-traded funds recorded $28.6 million in net inflows on Sep. 9, a break from the eight-day outflow streak recorded earlier.
Fidelity’s FBTC led the charge with reported inflows of $28.6 million, bringing its total inflows from inception to $9.45 billion. This follows after the fund experienced negative flows for the past seven trading days.
Bitwise’s BITB and ARK 21Shares’s ARKB followed next with inflows of $22 million and $6.8 million, respectively. Meanwhile, Invesco’s BTCO logged more modest inflows of $3.1 million following three days of no trading activity.
These inflows were offset by Grayscale’s GBTC, which logged outflows of $22.8 million, bringing its total outflows from its launch date to over $20 billion. Interestingly, BlackRock’s IBIT, the largest spot BTC ETF by net assets also shed $9.1 million in outflows on the day. The remaining six Bitcoin ETFs remained neutral.
Total trading volume for the 12 BTC ETFs dropped to $1.61 billion on Sep. 9, significantly lower than the $2.39 billion seen the previous day. These funds have recorded a cumulative net inflow of $16.92 billion since inception. At the time of writing, Bitcoin (BTC) was up 4.2% over the past day, trading at $56,915, per data from crypto.news.
Meanwhile, the nine-spot Ethereum ETFs logged in net outflows of $5.2 million on Sep. 9 following four consecutive days of net negative flows.
Grayscale’s ETHE led the outflows once again, with $22.6 million exiting the fund, bringing its total outflows to the $2.69 billion mark since its launch on July 23. Meanwhile, Fidelity’s FETH, Grayscale’s ETH, and Biwise’s ETHW were the only offerings to record inflows of $7.6 million, $8 million, and $1.8 million, respectively. The remaining five ETH ETFs saw no flows on the day.
These investment vehicles have also seen their daily trading volume drop to $124.51 million on Sep. 9, a major drop over the previous day. The spot Ether ETFs have experienced a cumulative net outflow of $573.49 million to date. At the time of publication, Ethereum (ETH) was also up by 2.6%, exchanging hands at $2,345.
VanEck announced today its decision to close and liquidate its Ethereum Strategy ETF, which is listed on the CBOE.
The Ethereum (ETH) ETF fund (ticker symbol ‘EFUT’) will cease trading after the market closes on Sept. 16, according to a VanEck press release, with liquidation expected around Sept. 23.
Shareholders who still hold EFUT shares on the liquidation date will receive a cash distribution based on the net asset value of their holdings.
The decision follows VanEck’s regular evaluation of factors such as “performance, liquidity, assets under management, and investor interest, among others.” According to the release, these criteria and other operational considerations led to the fund’s closure.
VanEck’s recent ETH moves
VanEck’s move comes after the approval of a spot Ethereum exchange-traded product, which may have influenced the decision to discontinue the futures-based ETF.
An ETP directly exposes an asset by holding it or its equivalent, like spot Bitcoin (BTC) or Ethereum. A futures ETF tracks the price of futures contracts, offering indirect exposure to an asset’s future price movements.
Investors may also receive a final distribution of any remaining net income or capital gains before the fund’s dissolution. For tax purposes, the company will provide a final report at year-end detailing any capital gains or losses associated with the liquidation, per the press release.
In January, VanEck announced the liquidation of its Bitcoin Strategy ETF, citing performance, liquidity, and low investor interest. The ETF, which primarily invested in Bitcoin futures, was set to be delisted after January 30.
Spot Bitcoin exchange-traded funds in the U.S. saw a significant jump in net positive flows while spot Ether ETFs outflows slowed down.
According to data from SoSoValue, the 12 spot Bitcoin ETFs logged outflows of $211.15 million on Sep. 5, a surge of over six times compared to the $37.29 million outflows recorded the previous day.
Fidelity’s FBTC led the lot with $149.5 million leaving the fund. Biwise’s BITB, Grayscale’s GBTC, and Grayscale Bitcoin Mini Trust followed with recorded outflows of $30 million, $23.2 million, and $8.4 million, respectively.
Notably, Fidelity’s FBTC also saw the largest outflows over the last seven days, with $374 million withdrawn, surpassing the $227 million in outflows from Grayscale’s GBTC.
The largest spot BTC fund, BlackRock’s IBIT, with over $20.91 billion in total inflows, remained neutral on the day, along with the eight remaining BTC ETFs.
Total daily trading volume for the 12 spot Bitcoin ETFs dropped to $1.35 billion on Sep. 5, down from $1.41 billion the previous day. At the time of writing, Bitcoin (BTC) was down 0.9% over the past day, trading at $56,327 per data from crypto.news.
Bitcoin’s price retreat happened as a sense of fear spread in the crypto industry. The closely watched crypto fear and greed index dropped to the extreme fear zone of 22, its lowest level in over a month, per data from Alternative. This fear is likely driven by ongoing concerns about a potential U.S. recession following a string of weak economic data.
Additionally, institutional demand for Bitcoin has weakened, with spot Bitcoin ETFs seeing outflows for seven consecutive trading days, shedding over $1 billion since Aug. 27.
Meanwhile, the nine spot Ether ETFs also showed bearish trends but with significantly smaller net outflows of $152.72K on Aug. 5 compared to the previous day, according to SoSoValue. Grayscale’s ETHE recorded $7.4 million in outflows, while the Grayscale Ethereum Mini Trust nearly offset this with $7.2 million in inflows.
The remaining seven spot ETH funds saw no activity on the day.
The total trading volume for the nine Ether ETFs fell to $108.59 million on Sep. 5 from $145.86 million on Sep. 4. At the time of publication, Ethereum’s (ETH) price dipped by 0.9%, exchanging hands at $2,378.
Ethereum’s fear and greed index also fell, reaching the fear zone of 34, reflecting growing uncertainty and cautious sentiment among investors in the market.
Ethereum derivatives volumes on the CME have plunged sharply following the launch of spot Ethereum ETFs, reflecting reduced institutional interest.
Trading volumes for Ethereum derivatives on the CME exchange experienced a significant decline in August as Ethereum futures volume plummeted 28.7% to $14.8 billion, while options volume dropped 37.0% to $567 million, marking the lowest levels since December 2023.
Data provided by CCData shows that the downturn comes just months after the introduction of spot Ethereum exchange-traded funds in late May, signaling “lower-than-expected institutional interest in the asset.”
Overall, CME’s derivatives trading volume plunged by 1.16% to $129 billion. While Bitcoin (BTC) futures saw a 3.74% increase to $104 billion, Bitcoin options trading fell by 13.4% to $2.42 billion. The drop in Ethereum (ETH) trading volumes contrasts with the robust performance of Bitcoin, which has surged over 45% this year compared to Ethereum’s more modest 20% rise.
As crypto.news reported earlier, crypto analyst Noelle Acheson attributed the reduced institutional interest in Ethereum ETFs to a preference for Bitcoin among investors seeking diversification. Acheson likened the current ETF landscape to the metals market, where gold ETFs command over $100 billion in assets, while silver ETFs hold less than $20 billion. Nonetheless, the analyst anticipates future growth in Ethereum ETF inflows, as institutional investors’ interest may increase over time.
The weaker performance of Ethereum is partly due to intensifying competition from competitors like Solana (SOL) and TRON (TRX), which are also attracting attention. Seasonality effects in August may also have contributed to the decreased trading activity, with expectations that this trend could extend into September.
Spot Bitcoin exchange-traded funds in the United States witnessed a four-month-high net outflow on Tuesday, Aug. 3.
According to data provided by Farside Investors, the U.S.-based spot Bitcoin (BTC) ETFs saw $287.8 million in net outflows yesterday, continuing their five-day downward momentum. This amount of outflows has not been seen since May 1.
Data shows that most of the outflows came from Fidelity’s FBTC and Grayscale’s GBTC funds, worth $162.3 million and $50.4 million, respectively.
Moreover, the ARK 21Shares ARKB and Bitwise’s BITB ETFs also recorded $33.6 million and $25 million in outflows, per Farside Investors. EZBC, HODL, BRRR and BTCO funds joined the bearish momentum with $8.4 million, $3.3 million, $2.5 million and $2.3 million in outflows, respectively.
The largest spot BTC fund with over $20.9 billion in total inflows, BlackRock’s iShares Bitcoin Trust ETF, remained neutral along with BTCW and Grayscale’s mini BTC fund.
Bitcoin dropped 4.6% in the past 24 hours and is trading at $56,330 at the time of writing. The leading cryptocurrency briefly touched a one-month low of $55,670 earlier today.
Spot Ethereum (ETH) ETFs also remained bearish with a net outflow of $47.4 million on Aug. 3, according to Farside Investors. Grayscale’s ETHE saw $52.3 million in outflows while Fidelity’s FETH recorded $4.9 million in inflows.
The remaining spot ETH funds stayed neutral.
Ethereum’s price also declined by 5.5% over the past day and is changing hands at $2,370 at the time of writing.
Spot Bitcoin exchange-traded funds in the United States have been seeing increased investor confidence as the cumulative net inflows reach a new all-time high.
According to data provided by Farside Investors, spot Bitcoin (BTC) ETFs recorded a net inflow of $202.6 million on Aug. 26. The total net inflows in the investment products surpassed the $18 billion mark.
The COO of Bitget Wallet Alvin Kan told crypto.news that “investors are likely turning to more stable assets.”
“The trend reflects investors’ confidence in Bitcoin, which will help drive the price of Bitcoin and the stability of the market in the longer run.”
Alvin Kan, the COO of Bitget Wallet, talking on spot BTC ETFs’ inflows.
Notably, most of the inflows, worth $224.1 million, came from BlackRock’s IBIT. Per Farside Investors, Franklin Templeton’s EZBC and WisdomTree’s BTCW recorded $5.5 million and $5.1 million in inflows, respectively.
On the other hand, Bitwise’s BITB, Fidelity’s FBTC and VanEck’s HODL funds saw $16.6 million, $8.3 million and $7.2 million in outflows. The remaining spot BTC ETFs stayed neutral.
Despite the increasing inflows into spot Bitcoin products, the asset’s price declined by 1.3% in the past 24 hours and is trading at $63,000 at the time of writing.
The COO of Bitget Wallet, formerly known as BitKeep, believes that BTC’s bullish momentum majorly depends on the U.S. Federal Reserve’s rate cuts. This could also help the market to become “fully active,” he added.
“In the short term, the Federal Reserve’s announcement of potential rate cuts could lead to increased market liquidity, a shift in investor behavior towards riskier assets, and potential volatility due to ongoing geopolitical tensions.”
Alvin Kan, the COO of Bitget Wallet, told crypto.news.
While Bitcoin ETFs have been thriving, spot Ethereum (ETH) ETFs in the U.S. saw their eighth consecutive day of net outflows yesterday. Per data from Farside Investors, these investment products registered $13.2 million in net outflows, coming from ETHE, FETH and EZET.
Ethereum slipped by 1.7% over the past day and is currently changing hands around the $2,700 mark.
Ethereum has outperformed Bitcoin in terms of price performance, especially when looking at time frames since its inception, halving years, and bull market periods. However, ETH has consistently underperformed since the bear markets of 2018-2019 and 2022-2023. In the 2024 halving year, for the first time, Ethereum is considerably trailing behind Bitcoin. In fact, it has been underperforming against Bitcoin for the past three years.
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ETH/BTC ratio plummets to 3.5-year low
Although fractals, a concept where similar patterns repeat over different timeframes, are not a foolproof method for predicting future outcomes, they provide valuable context into what might lie ahead.
In previous halving years, the ETH/BTC ratio broke down from its support line around September to December, only to begin an uptrend in the first quarter of the following bull market year. A similar scenario could unfold in 2024, as Ethereum has once again broken through its support. However, this time, the situation is more concerning. Unlike previous halving years, where the support line was relatively recent, the current support at 0.05 has held strong for the past 3.5 years, which suggests a more bearish outlook for Ethereum.
Another point of comparison can be drawn from 2019 when the Federal Reserve started cutting interest rates—a move that might recur in September 2024. Back in 2019, from the time the Fed began cutting rates until it stopped, the ETH/BTC ratio dropped by 22%.
Not only did the ratio drop in all these cases, but Ethereum’s price itself also performed negatively, except for 2020. However, the critical issue isn’t just whether the price went up or down; it is also whether holding Ethereum was the better investment decision. History has shown that, in similar circumstances, holding Bitcoin proved to be the more advantageous choice—and 2024 may very well continue that trend.
Ethereum supply reverses course and turns inflationary.
The supply of Ethereum had been decreasing steadily after the 2022 Merge. The decrease in Ethereum’s supply works through a mechanism called “burning,” which was introduced with the Ethereum Improvement Proposal (EIP) 1559 in August 2021. Basically, a portion of the transaction fees paid in ETH is burned or permanently removed from circulation. This reduces the total supply of ETH over time, especially during periods of high network activity when transaction fees are higher.
The reason why the supply of Ethereum started to drop following the 2022 Merge was because the network transitioned from a proof-of-work to a proof-of-stake consensus mechanism. Under PoW, new ETH was continuously issued to miners as rewards for validating transactions, which contributed to an increase in Ethereum’s total supply. However, with the Merge and the shift to PoS, the issuance of new ETH significantly decreased because validators, who now secure the network, receive much lower rewards compared to miners.
The Dencun upgrade in March 2024 marked a turning point, reversing this deflationary trend and making Ethereum’s supply inflationary once again. It introduced proto-danksharding and “blobs,” which optimize data storage and reduce transaction fees on layer-2 networks. Although Dencun improved scalability and made transactions more cost-effective, it also led to a major decrease in the amount of ETH being burned, which had been a critical factor in keeping Ethereum’s supply deflationary.
As a consequence, Ethereum’s supply began to increase, with over 213.5K ETH added to circulation since the Dencun upgrade. For comparison, Ethereum’s supply is now at the same level it was back in May 2023.
Negative ETF Flows Continue
Many expected that the approval of Ethereum ETFs would boost ETH by increasing demand and driving prices higher. However, this has not been the case so far. Instead, ETF outflows have become a concern, with a total of $465 million flowing out since trading began. The main driver of the trend is Grayscale’s ETHE, which has seen massive outflows, overshadowing the positive inflows from other Ethereum ETFs. The scale of the outflows from ETHE is so large that it creates a net negative effect when considering all Ethereum ETFs collectively.
An Ethereum ETF holds a certain amount of Ethereum, and each share represents a fraction of the total Ethereum it holds. When many investors want to buy ETF shares, the demand can push the price of the ETF shares above the actual value of the underlying Ethereum. In this case, Authorized Participants (APs), large financial institutions that work closely with the ETF provider, step in. The APs purchase ETH on the open market and exchange it with the ETF provider for new ETF shares, which they then sell to investors in the market at a higher price, making a profit. The process increases the supply of ETF shares, which helps bring the share price back in line with the value of the underlying assets.
Conversely, when there is low demand for the ETF, the price of its shares might fall below the value of the underlying Ethereum. Here, APs buy the undervalued ETF shares from the market, return them to the ETF provider, and receive Ethereum in exchange. They can then sell Ethereum on the open market at a higher price, profiting from the arbitrage. This reduces the supply of ETF shares and helps the price align more closely with the value of the underlying Ethereum.
Simply put, the ETH selling from APs as they redeem ETF shares could be one of the reasons why ETH’s price is down and struggling to recover.
Conclusion
While current data might suggest a bearish outlook for Ethereum, it remains a fundamentally strong asset. The number of active addresses on both its main chain and Layer 2 networks continues to increase. Ethereum still leads the blockchain industry, holding the top spot in total value locked (TVL) across DeFi platforms, with many projects being developed on its ecosystem. Furthermore, Ethereum continues to see regular development and upgrades.
However, given the current market conditions and the ongoing ETF outflows, Ethereum may not be the best investment in the short term, particularly through the rest of 2024. Yet, as we look forward to 2025, starting in Q1, Ethereum is likely to regain its momentum and could once again outperform Bitcoin in terms of returns, much like it has in previous market cycles.
Spot Ethereum exchange-traded funds, or ETFs, had seven consecutive days of outflows shedding over $5.7 million in assets on Friday, Aug. 23, bringing the cumulative figure to $464 million, data by SoSoValue shows.
Cumulative net assets locked in these Ethereum (ETH) ETFs stand at about $7.65 billion.
The Grayscale Ethereum Trust has $5 billion followed by the Grayscale Mini Ethereum Trust with $1.01 billion. It is followed by ETFs from Blackrock, Fidelity, Bitwise, and VanEck.
Institutional investors reluctance
In a note to Bloomberg, crypto analyst Noelle Acheson noted that many institutional investors are a bit reluctant to invest in Ethereum ETFs and prefer to focus on Bitcoin (BTC) for their diversification efforts.
However, she expects that Ether ETFs will likely see more inflows in the future, akin to the metal industry, where gold ETFs hold over $100 billion in assets while those tracking silver have less than $20 billion.
The opportunity cost
The other reason why Ethereum ETFs are struggling is the opportunity of holding them vis-a-vis buying Ether.
Buyers of the cheapest Ether ETF — Grayscale Mini Ethereum — will pay a small expense ratio of 0.15%. However, they will also avoid making money through staking.
Data by StakingRewardsshows that Ethereum yields about 3% or $300 if you invest $10,000 in it.
The data shows that Ethereum’s net staking inflow has risen in 20 of the last 30 days, reaching over $93.7 billion. Therefore, since Ether ETFs track Ethereum prices, many investors are opting for Ether.
Ethereum is underperforming Bitcoin
Ethereum vs Bitcoin YTD performance | Source: TradingView
Another likely reason is that Bitcoin is doing better than Ether this year. It has risen by over 45% while ETH is up by less than 20%.
This performance is likely because Ethereum is facing substantial competition from Solana (SOL) and Tron (TRX).
Tron has become a major player in stablecoin transactions, handling daily volumes of over $40 billion. Similarly, Solana has seen substantial traction because of its meme coins. As a result, in July, Solana was the biggest chain in DEX volumes, handling over $58 billion.
Ethereum’s ETF performance will likely be a red flag for financial services companies considering launching other altcoin ETFs like Solana and Avalanche.
Spot Bitcoin ETFs have started this week on a positive note, while spot Ether ETFs continued their third consecutive trading day of negative flows.
Data from SoSoValue shows that the 12 spot Bitcoin exchange-traded funds in the U.S. recorded $61.98 million in inflows on Aug. 19, representing a 72% increase compared to the net inflows of $36.01 million on the same day.
BlackRock’s IBIT led the lot with $92.7 million, bringing its total inflows since launch to $20.48 billion. Fidelity’s FBTC followed with modest inflows of $3.9 million. These funds were the only ones to record a second consecutive day of inflows.
Market data on inflows/outflows for spot Bitcoin ETFs as of Aug. 19 | Source: SoSoValue
Bitwise’s BITB and Invesco Galaxy’s BTCO recorded net outflows of $25.7 million and $8.8 million, respectively, offsetting part of the gains seen by these investment vehicles on Aug. 19. Grayscale’s GBTC saw no flows on the day, marking the first day this has occurred since its launch. The investment product has been recording continuous outflows, totaling $19.64 billion since its inception.
The remaining seven Bitcoin ETFs also remained neutral as the cryptocurrency market anticipated a correction. The cumulative spot BTC ETF inflows have now surpassed the $17.4 billion mark.
Data from crypto.news shows that the global crypto market capitalization jumped by 2.4% in the past 24 hours, currently standing at $2.24 trillion. The total 24-hour trading volume also surged, hovering around $79.5 billion. Bitcoin (BTC) rose by 4.2% over the past 24 hours, trading at $60,937 at the time of writing.
Ether ETFs record $13.5m in outflows
In contrast, the nine Ethereum ETFs collectively saw $13.52 million in outflows on Aug. 19, marking the third consecutive trading day of outflows.
Leading the outflows was Grayscale’s ETHE, with ongoing outflows of $20.3 million, contributing to a total outflow of $2.43 billion since its inception. Meanwhile, Grayscale Bitcoin Mini Trust and Bitwise’s ETHW were the only offerings to record modest inflows of $4.9 million and $1.9 million on the day. The remaining six Ethereum ETFs saw no activity on the day.
Trading volume for Ether ETFs dropped to $124 million, significantly lower than the $185 million seen the previous trading day. These funds have experienced a cumulative net outflow of $433.62 million to date. As of press time, Ethereum (ETH) soared by 2.3%, trading at $2,673.
