Two weeks ago, news of the first Mt. Gox repayments and sales by the German Federal Criminal Police Office (BKA) put pressure on the bitcoin price. A cascade of liquidations drove the markets sharply lower. ETF investors seized the opportunity and bought nearly two billion USD worth of bitcoin.
More than ten years after the Mt. Gox cryptocurrency exchange filed for bankruptcy, former customers received part of the $8 billion in bitcoin in the past weeks. At the same time, Germany's Federal Criminal Police Office (BKA) sold three billion USD worth of bitcoin seized in the Movie2K case. The market reacted with uncertainty, triggering large forced sales of leveraged derivative positions. Bitcoin (BTC) fell below $53,600. Investors from the traditional financial world immediately stepped in and allocated more funds via the bitcoin ETFs.
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Almost Two Billion USD in New ETF Inflows
On January 11, 2024, nearly a dozen fund providers received the green light to launch the first spot-based Bitcoin ETFs in the United States. Among the issuers are financial giants such as BlackRock, Fidelity, and others. In the first eight weeks, the products recorded over ten billion USD in net inflows - despite significant sell-offs by the Grayscale Bitcoin Trust (GBTC). Gradually, the inflows tapered off. However, the Bitcoin price drop seemed to offer investors an attractive entry point.
Flows of the US-Spot-Bitcoin-ETFs (USDm) / Source: CVJ.CH Bitcoin-ETF-Übersicht
Within the last two weeks, 1.96 billion USD flowed into Bitcoin ETFs. The market absorbed all the sales from the Federal Criminal Police Office. To date, the ETFs have recorded a total of 16.58 billion USD in net inflows. If the total is calculated with funds present in the Grayscale Trust and the price increase since the launch, the products manage around 60 billion USD. For comparison: US gold ETFs manage about twice as much, with 110 billion USD.
Ethereum ETF Approaching
Soon, the same providers will also be allowed to launch an ETF for the second-largest cryptocurrency by market capitalization, Ethereum (ETH). At the end of May, the SEC surprisingly initiated the first steps towards an approval. However, since the approvals, the authority has taken its time. The spot Bitcoin ETFs quickly commenced trading. Almost two months later, the premiere for the Ethereum ETFs is finally approaching. Most issuers submitted the final details for their funds this week. Fee structures are now public.
Overview of the imminent Ethereum-ETFs / Source: Bloomberg Terminal
The trading of the products is expected to start next Tuesday. Grayscale once again announced significantly higher fees than the competition. Accordingly, significant outflows from the Grayscale Ethereum Trust (ETHE) are expected. CVJ.CH will aggregate all inflows and outflows of the Ethereum ETFs after the launch, similar to the Bitcoin ETF overview.
