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Spot Bitcoin ETFs in the U.S. experienced large outflows on Tuesday. In contrast, spot Ethereum ETFs experienced net inflows of $98.4 million, with BlackRock's ETHA attracting the most investments. Despite heavy selling in Ethereum markets, ETF inflows suggest a slight recovery in sentiment towards the altcoin after a treacherous past few days in the market. Meanwhile, a survey by Barnes & Thornburg indicates rising interest in crypto investments among U.S. private investors, driven by institutional adoption and regulatory clarity.
Bitcoin Outflows vs. Ethereum Inflows
Spot Bitcoin exchange-traded funds in the U.S. continued their negative flows on Tuesday, with net outflows amounting to $148.5 million. Fidelity’s FBTC led the outflows among the 12 Bitcoin funds, with $64.48 million withdrawn. Grayscale’s converted GBTC fund saw $32.18 million in outflows, while Ark Invest and 21Shares’ ARKB recorded $28.88 million in net outflows. Franklin Templeton’s Bitcoin fund also faced losses of $23 million on the same day.
Bitcoin ETF Flow (Source: Farside Investors)
In contrast, BlackRock’s IBIT, the largest spot Bitcoin ETF by net asset value, reported no flows, along with seven other funds. On Tuesday, the total trading volume for spot Bitcoin ETFs reached $2.2 billion.
In contrast, spot Ethereum ETFs experienced net inflows on Tuesday, totaling $98.4 million. BlackRock’s ETHA led the inflows with $109.89 million, followed by Fidelity’s FETH at $22.49 million, Grayscale’s mini trust saw $4.7 million in inflows, and Franklin Templeton’s Ethereum fund drew in under $1 million.
Ethereum ETF Flow (Source: Farside Investors)
According to Augustine Fan, Head of Insights at SOFA.org, ETH experienced heavy selling across perpetual, spot, and ETF markets. However, the recent inflows could be a small rebound as risk sentiment recovers slightly. On Tuesday, Ethereum funds traded $330.13 million worth of assets, despite having accumulated $363 million in net outflows since their listing on July 23.
Fan added that the overall direction of crypto markets will likely follow high beta stocks and general risk appetite in the near term. For a more positive direction, factors like economic confidence in the U.S., a strong performance from Federal Reserve Chair Jerome Powell at Jackson Hole, and a sustained recovery in risk sentiment into September and October, will be necessary.
BlackRock's Ethereum Fund Among Top 2024 Performers
After BlackRock's spot Ethereum ETF experienced inflows of $109.9 million on Aug. 6, it brought its total inflows to $869.8 million since its launch in July. This was ETHA’s third largest flow day as investors tried to capitalize on ETH's price drop on Aug. 5.
The impressive $870 million inflows positions BlackRock's spot Ethereum ETF among the top six best-performing ETFs launched in 2024, according to Nate Geraci, the president of The ETF Store. Four of the other top-performing ETFs are spot Bitcoin ETFs, including BlackRock's iShares Bitcoin Trust.
ETHA also managed to gather $47.1 million during the crypto industry's "Black Monday," when over $600 million in leveraged long positions were liquidated. Despite the market's downturn, the combined inflows for ETHA on Aug. 5 and 6 place it in the top 10% of ETFs launched in 2024, according to Geraci.
This impressive performance was achieved without the spot Ethereum ETF issuers offering staking returns or options trading.
U.S. Investors Predict Rise in Crypto Investment
United States private investors are anticipating a surge in crypto investments in the coming months. A recent survey from the law firm Barnes & Thornburg revealed that 84% of participants expect private investment in cryptocurrency to rise over the next 12 months, and 59% are now more likely to invest in crypto funds than they were a year ago.
The survey included 138 limited partners, general partners, and service providers at private equity, venture capital, hedge fund, and investment banking firms across various industries in the U.S.
The report revealed a shift from last year when most respondents felt the crypto market negatively impacted their organizations. This Improved sentiment towards digital assets is very likely due to the institutional adoption of crypto investment products like ETFs and derivatives, along with regulatory clarity from the debut of crypto-tied ETFs in January.
However, 26% of investors are still less likely to invest in crypto funds over the next year. The main reasons that were provided for this decision included market volatility (46%), fraud (43%), and platform collapses (43%).
The survey also revealed that the main concern for limited partners is returns, with 54% listing it as a key issue. Financing terms have also become a major concern, with 50% of participants facing more challenging conditions for raising capital, up from 23% last year. Among general partners, fundraising was the most pressing issue, with 40% pointing towards it as a concern, compared to 23% last year.
Hong Kong's Mox Bank Introduces Crypto ETFs
The increasing interest in crypto products is already becoming more and more clear. Mox Bank, a virtual bank based in Hong Kong and a subsidiary of Standard Chartered, has launched a crypto ETF trading service for its customers and is considering expanding into spot trading markets.
On Aug. 7, Mox announced the introduction of a crypto ETF service, making it the first bank of its kind to offer direct trading of spot Bitcoin and Ethereum ETFs on its platform. The bank plans to expand its crypto offerings, including direct purchases and trading of crypto assets through a partnership with a licensed exchange.
Mox plans to position itself as a cost-effective option for crypto ETF trading, charging a 0.12% fee on transaction volume with a minimum of $3.85 (30 Hong Kong dollars) for Hong Kong-listed spot and derivatives ETFs, and 0.01% per share with a minimum of $5 for US-listed derivatives ETFs.
Spot crypto ETFs were approved and started trading in Hong Kong on April 30 as part of the country’s efforts to establish itself as a crypto hub for the Far East. Since its launch in September of 2020, Mox reported that about 28% of its customers are already invested in crypto, with 18% being active crypto traders.
Mox CEO Barbaros Uygun stated that the bank wants to build a global benchmark from Hong Kong by being innovative and responsive to changing markets. He added that adding Crypto ETFs to the Mox Invest platform allows customers to access emerging asset classes with confidence.
Jayant Bhatia, the bank’s chief product officer, mentioned to the South China Morning Post that the crypto ETF launch is just the beginning of Mox's offerings in the crypto investing space, although he did not specify when crypto trading services would be launched.
Hong Kong Spot Bitcoin ETF Inflows (Source: Coinglass)
Despite the launch, the three Hong Kong spot ETF issuers, Bosera HashKey, ChinaAMC, and Harvest Global, have struggled to gain traction. According to data from CoinGlass, there have been no flows for the three ETFs in August, and the total assets under management combined is just $236.3 million.
Capula Management Invests $500M in Bitcoin ETFs
Capula Management, Europe’s fourth-largest hedge fund, also recently invested almost $500 million in Bitcoin ETFs, according to public disclosures that were filed on Aug. 5. The UK-based hedge fund holds shares in the Fidelity Wise Origin Bitcoin Fund (FBTC) and BlackRock’s iShares Bitcoin Trust (IBIT).
The market downturn that started in July has impacted BTC ETFs, but despite this, BlackRock’s IBIT and Fidelity’s FBTC are still popular among professional financial advisers, according to the head of sector and industry research at VettaFi, Roxanna Islam. Other hedge funds are also reporting large positions in Bitcoin ETFs. Millennium Management recently shared that it has BTC ETF holdings worth almost $2 billion, alongside various Bitcoin-related assets.
