$250M Exit Bitcoin and Ethereum ETFs Ahead of Crypto Market Bloodbath

• BlackRock’s Bitcoin ETF now commands over $21 billion in net assets.
• The Grayscale Bitcoin Trust (GBTC) and Ethereum Trust (ETHE) have lost $21 billion since launch.
• The cryptocurrency market is down 14% for the past 24 hours.

U.S. spot Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) collectively lost $250 million last week as institutional appetite slowly wanes.

Despite billions in trading volumes, inflows and outflows are now averaging in the tens of millions, down from the hundreds of millions just a week ago.

Bitcoin ETFs

As per data from SoSoValue , Bitcoin ETFs saw particularly muted flows. Issuers wrapped Friday, Aug. 2, with $237.45 million in outflows, resulting in $80.69 million in net outflows.

Nevertheless, while concerning, last week’s outflow figures were pale compared to other outflow weeks, characterized by exits in the hundreds of millions.

Even the Grayscale Bitcoin Trust (GBTC) saw considerably smaller outflows, averaging around $50 million a day, albeit consistently. Perhaps the canary in the coal mine is that if GBTC exits have slowed, then maybe the overall appetite for BTC ETFs has.

That said, July was a solid month for BTC ETFs, which saw around $3 billion in net inflows. Despite this relatively quiet week for institutional investors, Bitcoin is trading at $52,000 amid a major crypto market sell-off.

Notably, BlackRock’s iShares Bitcoin Trust (IBIT) solidified its position as the largest ETF fund by overtaking the king of outflows, the Grayscale Bitcoin Trust (GBTC), in mid-July. IBIT now has $21.57 billion in net assets, and GBTC commands $19.06 billion.

Ethereum ETFs

U.S. spot Ethereum ETFs  aren’t off to the best possible start, with net outflows totaling $510.70 million in their first two weeks of trading. This trend continued in the week ending Aug. 2, with the ETFs shedding an additional $169.35 million in cumulative outflows.

This came as somewhat of a surprise to observers who anticipated a stronger appetite for the ETH ETFs than that of BTC. For the past six months, BTC ETF flows have been largely characterized by sizeable daily trading volumes in the billions and significant outflows from Grayscale’s GBTC.

With Ethereum ETFs, volumes are in the hundreds of millions, and Grayscale’s Ethereum Trust (ETHE) has followed in the footsteps of GBTC, bleeding out over $2 billion since its launch.

Meanwhile, BlackRock’s iShares Ethereum Trust (ETHA) has regularly seen modest but positive inflows totaling some $700 million. Grayscale’s gambit to launch the Mini Ethereum Trust is seemingly paying off, as it has seen $200 million in cumulative net inflows since it began trading.

Whales When?

Today, the crypto entire crypto market is in a downward spiral, onlookers are eager to see how institutional investors react to the market crash. Some see this as an ample opportunity for whales and institutions to rally behind BTC once more.

Meanwhile, others aren’t particularly happy  with the direction of play or the potentially negative impact of crypto ETFs on market dynamics.

As for ETFs, the markedly smaller inflows/outflows will likely provide some relief for Grayscale’s GBTC and ETHE funds. Furthermore, Grayscale’s “Mini” BTC and ETH funds are beginning to gain traction.

Optimistically, the crypto ETF market could see stronger buying activity than last week as BTC battles to stay above $50,000 and ETH falls below $2,500.

About the Author

Eddie Mitchell

Eddie has been writing news and content primarily for crypto news and industry players over the past seven years. With an eye for the bigger picture, Eddie prefers to investigate the broader implications of a story, as well as explore the weird and wonderful world of crypto. He believes blockchain has already changed the world, but observes the space overall with a skeptical and adoring eye.

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