On January 11, 2024, almost a dozen fund providers were given the green light to launch the first spot-based US bitcoin ETFs. Billions quickly flowed into the products. Over the last two weeks, however, sentiment turned and both the Bitcoin and Ethereum ETFs lost assets.
The first half of the year was characterized by a downright frenzy for the new Bitcoin ETFs. After a decade of failed attempts, the SEC finally relented under pressure from a US court and approved the funds. As a result, investor segments such as pension funds gained access to the asset class for the first time. The USD 17 billion in net inflows pushed the Bitcoin price to a new all-time high. However, the euphoria flattened out over the summer.
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Longest streak of Bitcoin ETF outflows
Since March, the Bitcoin price has been consolidating below its new all-time high of USD 74,000. The expected rally after the halving has largely failed to materialize. With consistently lower highs, ETF investors are now losing patience. Since Tuesday, August 27, Bitcoin ETFs have recorded daily outflows in the triple-digit million range. In total, the products lost USD 1.18 billion in assets within two weeks.
| Date | IBIT | FBTC | BITB | ARKB | GBTC | Others | Total (USDm) |
|---|
Breakdown of the flows of the US spot Bitcoin ETFs (USDm) / Source: CVJ.CH Bitcoin ETF overview
The outflows are likely to be attributable to Bitcoin's rather sluggish price performance and macroeconomic concerns. Nevertheless, the overall balance of the funds remains positive on the whole. Some asset managers are also taking the first steps towards actively marketing the products to clients. ETFs currently manage USD 55.3 billion in Bitcoin. By comparison, US gold ETFs account for around twice that amount at USD 113 billion.
Ethereum ETFs: a complete disappointment
For the recently approved Ethereum ETFs, this initial rush failed to materialize. Ultimately, Ethereum's value proposition is more complex and requires greater educational efforts. Bitcoin as “digital gold” seems easier for investors to grasp than a decentralized smart contract network. In fact, Ethereum ETFs have not only attracted few new assets. The funds have seen net outflows of USD 568.5 million since launch.
Breakdown of the flows of the US spot Ethereum ETFs (USDm) / Source: CVJ.CH Ethereum ETF overview
Outflows have slowed considerably over the past few weeks. However, the generally low volume of Ethereum ETFs suggests a low level of interest. How net outflows from the new funds came about in the first place can be read in the following article.
