The Bitcoin ETF attracted $5 billion in net inflows, while the Ethereum ETF saw a net outflow of $500 million. BlackRock's IBIT made over $224 million in a single day and currently holds over 350,000 BTC. The Ethereum ETF has struggled due to liquidity issues and Grayscale's $2.5 billion outflow.
Recent developments in the cryptocurrency exchange-traded fund (ETF) market have highlighted a stark discrepancy in the performance of Bitcoin and Ethereum ETFs.
Comparing Farside Investors' Bitcoin ETF flow data to Ethereum ETF flow data, the Ethereum Spot ETF has been disappointing compared to the Bitcoin ETF: since launch, the Ethereum ETF has experienced net outflows of approximately $500 million, contrasting with the $5 billion net inflows recorded by the BTC ETF over a similar period since launch.
Several factors contribute to this disparity: First, Bitcoin’s “first-mover advantage,” high liquidity, and lack of staking opportunities in Ethereum ETFs make it more attractive to institutional investors.
Additionally, unexpected outflows from Grayscale's Ethereum Trust (ETHE) reached $2.5 billion, far exceeding the bank's original $1 billion estimate, further undermining the performance of the Ethereum ETF. To combat these outflows, Grayscale introduced a mini-Ethereum ETF, but it only saw inflows of $200 million.
In contrast, BTC ETFs have shown resilience and robust performance, with U.S.-based BTC ETFs posting an impressive eight-day streak of gains, led by BlackRock's iShares Bitcoin Trust (IBIT), which saw net inflows total $202 million.
On August 26 alone, IBIT attracted more than $224 million in net inflows, bringing its total Bitcoin holdings to over 350,000 BTC, solidifying its dominance in the market.
Rival funds managed by Franklin Templeton and WisdomTree also saw positive inflows, while funds managed by Fidelity, Bitwise and VanEck saw negative inflows. Notably, Grayscale's Bitcoin Trust (GBTC) has seen a decline in redemptions over the past two weeks, signaling a stabilization of the market.
As investor confidence in Bitcoin ETFs grows, asset managers are increasingly exploring combination ETFs that offer exposure to both Bitcoin and Ethereum, reflecting the evolving trends in the cryptocurrency investment landscape.
