Key Takeaways:
This week has been rather significant for the crypto industry as the US Securities and Exchange Commission (SEC) greenlit the first batch of exchange-traded funds (ETFs) backed by the world’s second-largest cryptocurrency by market capitalization – Ethereum (ETH) – for trade on Wall Street.
Spot Ethereum ETFs from eight issuers, including BlackRock, Fidelity, VanEck, 21Shares, Bitwise, Grayscale, Franklin Templeton, and Invesco, began trading on Tuesday and generated over $1 billion in cumulative trading volume and $140 million in inflows.
As per sourced data, the ETFs tracking the price of Ether achieved 79% of the day-one total flows recorded by spot Bitcoin products that were launched in January. The spot Bitcoin ETFs amassed an impressive $4.6 billion in trading volume and $655 million in inflows on their debut.
BlackRock’s Digital Assets Head Claims Bitcoin Has More Market Demand Than Ethereum
Meanwhile in Nashville, Tennessee, 20,000 crypto enthusiasts are expected to attend the Bitcoin 2024 convention – the world’s largest crypto conference. The event’s significance has risen in recent years, thanks to the popularity and demand for crypto assets.
This year’s convention comes at a time when ETFs issued by big players in the traditional financial sector are offering exposure to two of the largest cryptocurrencies: Bitcoin (BTC) and Ethereum (ETH).
On Wednesday, while speaking to Bloomberg at the Bitcoin 2024, asset manager BlackRock’s head of digital assets, Robert Mitchnick, said that Bitcoin ETFs are currently drawing more investor demand than their Ethereum counterparts.
While the spot Ethereum ETFs are new entrants into the market, the spot Bitcoin ETFs have been trading for over six months and amassed more than $60 billion in assets under management.
Mitchnick highlighted that while it’s still early to make a judgment, the inflows are yet to indicate whether investors will reallocate their capital from the Bitcoin ETFs into the Ethereum ETFs.
Investors Warn of Massive Outflows From Grayscale’s Bitcoin And Ethereum ETFs
Even though the spot Ether ETFs matched nearly 80% of the total day flows recorded by spot Bitcoin ETFs, outflows from the Grayscale Ethereum Trust (ETHE) slashed that number down to 16% as investors rushed to move their funds into Ethereum ETFs from other issuers like BlackRock and Fidelity that charged lesser fees.
Despite the hype surrounding the investment products, Ethereum responded with a market slump and was down by 7% on July 25th.
The spot Bitcoin ETFs also experienced similar outflows when they were initially launched. Investors pivoted away from Grayscale’s Bitcoin ETF (GBTC) to other offerings. Observers say that if this trend continues, then the markets may see days or even weeks of outflows from the Grayscale funds.
Market analysts say the total flows could flip positive if the spot Ether ETFs capture Wall Street’s demand. Speaking to Bloomberg’s James Seyffart, Mitchnick also noted that BlackRock currently does not see much ETF demand for crypto assets other than Bitcoin and Ethereum.
Spot Bitcoin ETFs Record Largest Net Inflow Since March At $526.7 Million
BlackRock’s iShares Bitcoin Trust (IBIT) ETF reported a net inflow of $526.7 million on Monday, the largest fund intake since mid-March when BTC was aiming for an all-time high and demand for spot Bitcoin ETFs was at its peak.
According to data from SoSoValue, the ten spot Bitcoin ETFs trading in the US, except for Bitwise’s BITB, drew in a total of $533.57 million in net inflow. Fidelity’s FBTC came in second with $23.72 million in inflow, followed by Invesco and Galaxy Digital’s BTCO with $13.65 million, and Franklin Templeton’s Bitcoin Fund with $7.87 million.
On the other hand, VanEck’s HODL ETF logged $38.37 million in net outflow. The remaining funds from Grayscale (GBTC), and Ark Invest – 21Shares (ARKB) reported zero outflows.
The spot Bitcoin ETFs have accumulated net inflows worth $17.59 billion and a total market capitalization of over $62 billion since they began trading in January 2024.
At the time of writing, Bitcoin (BTC) is trading at $66,929 – up 4.18% in the last 24 hours. Ethereum (ETH) is currently changing hands at $3,265 – rising 2.48% from its price yesterday.
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