Spot Bitcoin ETFs See Biggest Outflows in 4 Months as Market Selloff Hits Risk Assets
- WBOYOriginal
- 2024-09-05 03:10:10838browse
More than $287 million was withdrawn from the 11 U.S.-listed ETFs, the biggest day for outflows since May 1, according to Farside Investors data.
Investors pulled some of their money from bitcoin exchange-traded funds on Tuesday, as the broader market also saw outflows and as bitcoin fell further from record highs.
More than $287 million was withdrawn from the 11 U.S.-listed ETFs, the biggest day for outflows since May 1, according to Farside Investors data. The funds hit the market in January, following a ruling by the SEC that allowed financial firms to package bitcoin into ETFs, the same way they do for stocks and bonds.
Fidelity led redemptions, with investors on Tuesday selling more than $162 million worth of shares in its FBTC fund. Grayscale, which has seen net outflows of more than $19.8 billion since converting its trust to an ETF in January, recorded outflows of $50.4 million. The fund issued by Ark 21Shares had outflows of $33.6 million, and investors sold $25 million worth of shares in Bitwise's BITB offering.
Much of the initial enthusiasm surrounding bitcoin ETFs has dissipated in the last few months, following a blockbuster debut that broke records for the ETF market. Spot bitcoin funds now hold a total of around $52.6 billion in assets under management, $10 billion off their peak.
A large portion of the decline is due to the drop in the price of bitcoin, which reached a record at over $73,000 in March and has since slid to about $58,400. Bitcoin fell almost 3% on Tuesday, which was also a down day for equities after weak manufacturing data stoked fears of an economic slowdown. It was the fifth consecutive day of redemptions across the spot funds.
Spot ether ETFs, which launched in July, also experienced a rough months. On Tuesday, the cryptocurrency plunged almost 6%, leading to outflows in the related ETFs. JPMorgan analysts noted that redemptions "were entirely driven by Grayscale," as investors unloaded more than $52 million worth of shares in its ETHE product.
Overall, flows were largely flat. Other than inflows of $4.9 million into Fidelity's spot ether product, all other funds were flat for the day. The total assets of the spot funds fell to around $6.7 billion from $10.2 billion in July.
As of the end of the second quarter, Wall Street banks and hedge funds were buyers of bitcoin ETFs. Data regarding ether ETF purchases won't show up until the next round of filings.
Quarterly disclosures with the SEC showed that institutional ownership of spot bitcoin ETFs rose to 24% by the end of the quarter, according to a note from analysts at H.C. Wainwright.
Goldman Sachs made its debut in the crypto ETF market in the period, purchasing $418 million worth of bitcoin funds.
Morgan Stanley started earlier but reduced its holdings in the latest quarter. Of the investment bank's $1.5 trillion in assets under management, it held $189 million worth of spot bitcoin ETFs, down from roughly $270 million in the prior period.
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