US Spot Bitcoin ETFs See Net Outflows in August
Date: 2024-09-02 Author: Henry Casey Categories: CRYPTO PAYMENTS
US spot Bitcoin ETFs saw net outflows of about $94 million in August.
This move into negative territory came despite an encouraging eight-day streak of positive inflows earlier in the month.
According to SoSoValue, spot Bitcoin ETFs saw their best performance of the month on August 23, when they attracted more than $250 million.
However, this positive momentum could not offset the $237 million lost on August 2, the worst day for these funds in August.
Bitcoin Price Drop Causes BTC Funds to Decline in Assets Held
With Bitcoin's price falling from previous monthly highs, the total net asset value of all commercially available Bitcoin funds fell by $4.24 billion, bringing the total to about $53.8 billion by the end of August.
The situation worsened in the second half of the month, with net outflows exceeding inflows.
Notably, industry leader BlackRock's IBIT fund saw its first outflows since May, which also contributed to the month's negative results.
On the last trading day of the month, IBIT and most other funds saw no net inflows, while four funds saw outflows.
Grayscale's GBTC fund saw the largest outflow that day, at $70 million, bringing its total year-to-date outflows to nearly $20 billion.
Other notable outflows included $65 million from ARK and 21Shares ARKB, $16 million from Bitwise BITB, nearly $13 million from Fidelity FBTC, and $11 million from Invesco BTCO.
On the Ethereum side, spot Ether ETFs have also struggled.
They saw no significant inflows or outflows on the last trading day of August.
Despite seeing over $1 billion in trading volume during their first days on the market in July, spot Ether ETF activity continues to decline.
Since their inception, these funds have seen a total net outflow of $477.25 million, according to SoSoValue data.
As of the end of August, spot Ether ETFs held nearly $7 billion in assets, with Grayscale ETHE and ETH funds accounting for $5.4 billion of that.
The third-largest fund, BlackRock ETHA, along with others, saw weekly outflows of $12.6 million across all spot ether ETFs.
Spot Ether ETFs Expected to Perform Poorly
Spot ether ETFs have struggled with net outflows since their U.S. launch last month, in contrast to spot bitcoin ETFs, according to a JPMorgan research report published Wednesday.
Trading in the ether ETFs began on July 23, about six months after the bitcoin funds launched.
In the first five weeks after each launch, ether ETFs saw net outflows of about $500 million, while bitcoin ETFs attracted more than $5 billion, JPMorgan analysts noted.
The bank attributed the weak performance of ether ETFs to bitcoin’s first-mover advantage, lack of staking options, and low liquidity, which made ether ETFs less attractive to institutional investors.
However, the $2.5 billion outflow from Grayscale's Ethereum Trust (ETHE) came as a surprise.
JPMorgan had expected about $1 billion in outflows as the fund transitioned from a closed-end fund to a spot ETF.
To mitigate the outflows from ETHE, Grayscale introduced a mini-ETF on Ether, but that fund only managed to raise $200 million.
