On July 24, 2024, the crypto ETF market experienced a notable shift in investment flows, with Bitcoin ETFs enjoying a resurgence while Ethereum ETFs faced significant declines. Here’s a breakdown of the key developments:
Bitcoin ETF Inflows Surge
On Wednesday, Spot Bitcoin ETFs saw a substantial boost, recording over $44 million in net inflows. This was driven largely by BlackRock’s impressive $66 million contribution. Fidelity’s FBTC added a modest $1.4 million, while Ark 21Shares’ ARKB saw a $3.3 million influx. Despite this positive performance, the Grayscale Bitcoin Trust (GBTC) experienced $26.2 million in outflows.
Ethereum ETFs Face Major Outflows
In stark contrast, Ethereum ETFs struggled with massive outflows. The total for the day reached $133.3 million. While Fidelity’s FETH and Bitwise’s ETHW had positive inflows of $74.6 million and $29.6 million respectively, these were overshadowed by significant withdrawals. Grayscale’s Ethereum Trust (ETHE) saw a staggering $326.9 million in outflows, primarily due to its high fee of 2.50%. Additionally, the BlackRock Ethereum ETF (ETHA) saw its inflows drop sharply from $266.5 million on debut to just $17.4 million.
Investor Sentiment and Fee Impact
The sharp decline in Ethereum ETF flows highlights a shift in investor sentiment and concerns over high management fees. Despite Grayscale’s Mini-Ethereum Trust attracting $45.9 million thanks to its low fee of 0.15%, the overall assets under management (AUM) for Spot Ethereum ETFs fell significantly from $10.255 billion to $9.538 billion.
Future Outlook
Experts suggest that Ethereum’s price might continue to decline in the wake of a sell-the-news sentiment. Although Ethereum ETF inflows were expected to provide long-term support, the negative flow trend on the second day of trading raises uncertainty about the future performance of these funds and other upcoming crypto ETF approvals.
In summary, the crypto ETF market is currently polarized, with Bitcoin ETFs thriving while Ethereum ETFs struggle amidst investor skepticism and fee concerns. The coming weeks will be crucial in determining whether these trends will persist or if a turnaround is on the horizon.
