U.S. Spot Bitcoin ETFs Face $300 Million Outflows, Ending Inflow Strea

Significant Outflows in US-Based Bitcoin ETFs

Recent reports from The Block reveal that US-based Bitcoin exchange-traded funds (ETFs) encountered major challenges last week, experiencing over $300 million in outflows. This development marked a notable shift, reversing a three-week streak of positive inflows. Despite small inflows recorded on Friday, they were inadequate to offset the considerable withdrawals made earlier in the week.

Weekly Performance and Inflows

On Friday, spot Bitcoin ETFs did manage to capture a slight daily inflow of $25.6 million. This surge was primarily driven by Bitwise's BITB fund, which attracted $15.3 million. Fidelity’s FBTC followed closely with an inflow of $13.6 million, while contributions from VanEck’s HODL and Ark & 21Shares’ ARKB were recorded at $5.29 million each. Unfortunately, these inflows weren't sufficient to counterbalance the overall negative trend, as total net assets fell from $61.21 billion on September 27 to a record low of $57.73 billion by the end of the week.

Decline in Bitcoin Price

The ETF outflows coincided with a downward shift in Bitcoin's price, which dropped from around $65,000 on September 27 to approximately $62,000 on October 4. This decline further influenced investor sentiment, contributing to the prevailing outflow trend.

Ethereum ETFs Also Face Challenges

Additionally, US-based Ethereum ETFs similarly endured struggles, as they registered a modest daily inflow of $7.4 million on the same Friday but concluded the week with a net negative outflow of $30.7 million. BlackRock's ETHA fund led the inflows for Ethereum ETFs, accumulating $14.7 million, with Bitwise’s ETHW following with $871,000. However, these gains were effectively negated by $8.2 million in outflows from Grayscale’s ETHE fund. The price of ether also fell significantly, declining from about $2,700 on September 27 to around $2,400 by October 4.

BlackRock's Ethereum Fund Performance

Despite seeing its net asset value exceed $1 billion for the first time last week, BlackRock’s spot Ethereum fund has since dropped below that threshold, currently holding assets valued at $987.6 million, according to data from SoSoValue.

Bitwise's Strategic Revamp Amid Market Fluctuations

In light of these developments, Bitwise has announced plans to revamp its three crypto futures exchange-traded funds by integrating Treasuries into their strategies. Matt Hougan, the Chief Information Officer of Bitwise, emphasized that "the goal is to help minimize downside volatility and potentially improve risk-adjusted returns." This initiative reflects an understanding of the ongoing challenges present in the cryptocurrency landscape.

Conclusion

As the cryptocurrency market continues to navigate price fluctuations and evolving investor sentiment, these trends underline the persistent difficulties Bitcoin and Ethereum ETFs face in attracting and sustaining investor capital.

U.S. Spot Bitcoin ETFs Face $300 Million Outflows, Ending Inflow Streak