The U.S. spot Bitcoin exchange-traded funds (ETFs) experienced $71.73 million in net outflows on Thursday, marking the third consecutive day of declines. BlackRock’s IBIT, the largest spot Bitcoin ETF, saw its first net outflows since May 1, with $13.51 million exiting the fund. Other major Bitcoin ETFs like Grayscale’s GBTC, Fidelity’s FBTC, Bitwise’s BITB, and Valkyrie’s BRRR also reported outflows. However, Ark and 21Shares’ ARKB managed to buck the trend with net inflows of $5.34 million. Total trading volumes for the 12 spot Bitcoin ETFs also dropped to $1.64 billion on Thursday.
Spot Ethereum ETFs also saw negative sentiment with $1.77 million in net outflows on Thursday after a brief period of inflows. The Grayscale Ethereum Trust (ETHE) led the outflows with $5.35 million, partially offset by net inflows of $3.57 million into the Grayscale Ethereum Mini Trust (ETH). The remaining seven Ethereum funds showed no movement, and total trading volume for the nine spot Ethereum ETFs fell to $95.91 million on Thursday. The outflows came as both Bitcoin and Ethereum prices saw slight declines, with Bitcoin at approximately $58,984 and Ethereum at around $2,516.
According to a JPMorgan research report released on Wednesday, Ether spot ETFs have struggled with net outflows since their U.S. launch last month, unlike spot Bitcoin ETFs. Ether ETFs began trading on July 23, about six months after the launch of Bitcoin funds. In the first five weeks following each launch, Ether ETFs experienced around $500 million in net outflows, while Bitcoin ETFs saw inflows exceeding $5 billion. JPMorgan’s analysts attributed the weak performance of Ether ETFs to Bitcoin’s “first mover advantage,” the absence of staking options, and lower liquidity, making Ether ETFs less attractive to institutional investors.
Despite expectations, there was $2.5 billion in outflows from Grayscale’s Ethereum Trust (ETHE), which was surprising. JPMorgan had anticipated about $1 billion in outflows as the trust transitioned from a closed-end fund to a spot ETF. To address the outflows from ETHE, Grayscale introduced a mini Ether ETF, which attracted $200 million in inflows. The weaker demand for Ether ETFs compared to Bitcoin is driving increased interest in a combined ETF offering exposure to both assets. Institutional and retail ownership of spot Bitcoin ETFs remained largely unchanged from the first quarter, with retail investors holding about 80%, as highlighted in the report.
In conclusion, U.S. spot Bitcoin and Ethereum ETFs saw net outflows on Thursday, with Bitcoin ETFs experiencing more significant declines than Ethereum ETFs. While most Bitcoin and Ethereum ETFs reported outflows, some funds like Ark and 21Shares’ ARKB managed to attract inflows. The weak performance of Ether ETFs compared to Bitcoin was attributed to various factors like Bitcoin’s first mover advantage, absence of staking options, and lower liquidity. The introduction of a mini Ether ETF by Grayscale aimed to address outflows from the main Ethereum Trust, but overall interest in Ether ETFs remains lower than Bitcoin. As the cryptocurrency market continues to evolve, it will be interesting to see how these trends in ETF flows develop over time.
