On Friday, the cryptocurrency market witnessed a dramatic shift as spot Bitcoin exchange-traded funds (ETFs) experienced an outflow of $812.25 million. This marked the second-largest single-day loss in the history of spot Bitcoin ETFs and signified a sharp reversal after a week of relatively positive gains for this sector. With the recent withdrawals, cumulative net inflows to these funds now stand at $54.18 billion, while total assets under management (AUM) have fallen to $146.48 billion. This figure now represents 6.46% of Bitcoin’s market capitalization, emphasizing how significant these movements are in the broader financial landscape.
In terms of specific contributions to this decline, Fidelity’s Bitcoin ETF (FBTC) led the pack with outflows reaching $331.42 million. Closely behind, ARK Invest’s ARK Bitcoin ETF (ARKB) recorded redemptions of $327.93 million. Grayscale’s Bitcoin Trust (GBTC) also reported substantial outflows with a loss of $66.79 million, while BlackRock’s Bitcoin ETF (IBIT) experienced a smaller setback of $2.58 million. It’s worth noting that despite these substantial withdrawals, trading volumes remained robust. Across all Bitcoin ETFs, trading volumes reached an impressive $6.13 billion, with BlackRock’s IBIT contributing a staggering $4.54 billion to that total, signaling ongoing investor interest amidst the outflows.
The ripple effects of the Bitcoin ETFs’ outflows were felt in the Ether ETF sector as well, marking the end of a 20-day streak of net inflows. On the same day, Ether ETFs saw a collective outflow of $152.26 million, which reduced their total AUM to $20.11 billion, equivalent to 4.70% of Ether’s market capitalization. Within this space, Grayscale’s Ether Trust (ETHE) suffered the most significant losses, with a dip of $47.68 million, followed by Bitwise’s ETHW at $40.30 million. Fidelity’s Ether ETF (FETH) also faced $6.17 million in redemptions, while BlackRock’s ETHA managed to remain unchanged. Trading volumes across all Ether ETFs summed to $2.26 billion, with Grayscale’s ETH product generating $288.96 million in daily trades, highlighting continued trading activity despite the outflows.
Interestingly, this downturn follows a period of heightened demand for Ether ETFs, which previously led to record-breaking inflows. On July 16, for instance, Ethereum ETFs experienced inflows of $726.74 million, the largest since their launch, and followed that up with another remarkable day of $602.02 million the next day. However, this latest reversal signifies a notable shift in investor sentiment, prompting questions about the future trajectory of these funds.
Amid these fluctuations, a recent report by Standard Chartered unveiled a fascinating aspect of the current market dynamics. According to their findings, corporations are currently acquiring Ether at double the rate of Bitcoin. Since early June, crypto treasury firms are estimated to have purchased about 1% of Ethereum’s total circulating supply. The bank notes that this accumulation trend, along with steady inflows into U.S. spot Ether ETFs, has been a contributing factor to Ether’s recent price rally. Looking ahead, Standard Chartered forecasts that Ethereum treasury holdings might reach up to 10% of the total supply by year’s end, driven largely by staking activities and participation in decentralized finance (DeFi).
As the cryptocurrency landscape continues to evolve rapidly, observing these trends and shifts will be essential for investors and industry participants alike. It reflects not only the market’s volatility but also the changing interests and strategies of institutional players in the digital asset space.
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Source: [1] Spot Bitcoin ETFs see second-largest outflow, Ether ETFs end 20-day streak (https://coinmarketcap.com/community/articles/688db50d2071ae4d318f4fe4/)
