By the end of the month, things had turned around, with net outflows exceeding net inflows.
Exchange-traded funds (ETFs) that track spot Bitcoin in the United States saw a net withdrawal of about $94 million in August.
Despite an encouraging eight-day streak of positive inflows earlier in the month, the shift to negative territory occurred.
Data from SoSoValue reveals that spot Bitcoin ETFs had their best day of the month on August 23, netting over $250 million.
Nevertheless, August’s worst day for these funds, August 2, saw a $237 million loss, which could not be offset by the positive momentum.
Decline in Bitcoin Price Leads to Drop in Assets Held by BTC Funds
The price of Bitcoin fell from its earlier highs earlier in the month, resulting in a $4.24 billion drop in the total net assets held by all commercially available Bitcoin funds by the end of August, to approximately $53.8 billion.
By the end of the month, things had turned around, with net outflows exceeding net inflows.
Notably, the IBIT fund managed by industry leader BlackRock experienced its first withdrawals since May, which added to the month’s overall poor performance.
Four funds recorded outflows on the last trading day of the month, while IBIT and the majority of other funds reported zero net inflows.
With $70 million leaving the fund on that particular day, Grayscale’s GBTC saw the biggest outflow of the year, totaling almost $20 billion.
Other noteworthy withdrawals were $16 million from Bitwise’s BITB, approximately $13 million from Fidelity’s FBTC, $65 million from ARK and 21Shares’ ARKB, 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.
On August 30, Eastern Time, the total net inflow and net outflow of Ethereum Spot ETF were both $0.00, which was the first time in 30 trading days since the launch of Ethereum Spot ETF that the inflow and outflow were zero. Currently, the total net asset value of Ethereum Spot…
— Wu Blockchain (@WuBlockchain) August 31, 2024
Spot ether ETF activity has steadily decreased, despite over $1 billion in trading volume during their first few days of availability in July.
According to SoSoValue, these funds have recorded a cumulative net outflow of $477.25 million since their founding.
Nearly $7 billion was held in assets by spot ether ETFs as of the end of August, with $5.4 billion coming from Grayscale’s ETHE and ETH funds.
Among other funds, the third-largest fund, BlackRock’s ETHA, saw a weekly withdrawal of $12.6 million from 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.
On July 23, ether exchange-traded funds (ETFs) went live, roughly six months after Bitcoin funds launched.
JPMorgan’s analysts observed that during the initial five weeks after each launch, net inflows for Ether ETFs exceeded $500 million, whereas net inflows for Bitcoin ETFs exceeded $5 billion.
The lack of staking options, lower liquidity, and Bitcoin’s “first mover advantage” were cited by the bank as the reasons for the poor performance of ether ETFs, which turned institutional investors away.
What was unexpected, though, was the $2.5 billion that Grayscale’s Ethereum Trust (ETHE) withdrew.
A $1 billion outflow was something JPMorgan had expected as the trust moved from a closed-end fund to a spot ETF.
Grayscale launched a mini ether exchange-traded fund (ETF) to counteract the ETHE outflows, but it only brought in $200 million.