U.S. Spot Bitcoin ETFs See Net Outflows in August Despite Eight-Day Inflow Streak
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In August, U.S. spot Bitcoin exchange-traded funds (ETFs) experienced a net outflow of approximately $94 million.
The shift to negative territory came despite an encouraging eight-day streak of positive inflows earlier in the month.
Data from SoSoValue reveals that spot Bitcoin ETFs had their best day of the month on August 23, netting over $250 million.
However, the positive momentum was not enough to counterbalance the $237 million lost on August 2, the worst day for these funds in August.
Decline in Bitcoin Price Leads to Drop in Assets Held by BTC Funds
As a result of Bitcoin’s declining price from earlier highs in the month, the total net assets held by all commercially available Bitcoin funds decreased by $4.24 billion, bringing the total to around $53.8 billion by the end of August.
The latter part of the month saw a reversal in fortunes, with net outflows surpassing inflows.
Notably, industry leader BlackRock’s IBIT fund recorded its first outflows since May, contributing to the overall negative monthly performance.
On the final trading day of the month, IBIT and most other funds reported zero net inflows, while four funds logged outflows.
Grayscale’s GBTC saw the largest outflow on that day, with $70 million leaving the fund, bringing its year-to-date cumulative outflows close to $20 billion.
Other notable outflows included $65 million from ARK and 21Shares’ ARKB, $16 million from Bitwise’s BITB, nearly $13 million from Fidelity’s FBTC, and $11 million from Invesco’s BTCO.
On the Ethereum side, spot Ether ETFs also faced challenges.
On the last trading day of August, they recorded no significant inflows or outflows.
Despite logging over $1 billion in trading volume during their initial days on the market in July, spot ether ETFs have seen a steady decline in activity.
Since their inception, these funds have registered a total cumulative net outflow of $477.25 million, according to SoSoValue.
As of the end of August, spot ether ETFs held nearly $7 billion in assets, with Grayscale’s ETHE and ETH funds accounting for $5.4 billion of that total.
The third-largest fund, BlackRock’s ETHA, along with others, experienced a weekly outflow of $12.6 million across all spot ether ETFs.
Spot Ether ETFs Was Expected to Perform Poorly
Ether spot ETFs have struggled with net outflows since their U.S. launch last month, in contrast to spot Bitcoin ETFs, according to a JPMorgan research report released on Wednesday.
Ether ETFs began trading on July 23, approximately six months after the launch of Bitcoin funds.
In the first five weeks following each launch, Ether ETFs experienced around $500 million in net outflows, while Bitcoin ETFs saw inflows exceeding $5 billion, JPMorgan’s analysts noted.
The bank attributed the weak performance of ether ETFs to Bitcoin’s “first mover advantage,” the absence of staking options, and lower liquidity, which made ether ETFs less attractive to institutional investors.
However, what came as a surprise was the $2.5 billion in outflows from Grayscale’s Ethereum Trust (ETHE).
JPMorgan had anticipated about $1 billion in outflows as the trust transitioned from a closed-end fund to a spot ETF.
To mitigate the outflows from ETHE, Grayscale introduced a mini ether ETF, but this fund only managed to attract $200 million in inflows.
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