22nd July 2024, London, UK & Vancouver, Canada.
Bitcoin (BTC) ended the week at approximately $68,150, marking a 12.1% increase from the previous week’s closing price of around $60,000. BTC saw sustained growth on Monday, reaching almost $65,000 before stabilising until Thursday and then surging over the weekend to close the week above $68,000.
BTC Spot ETFs experienced robust inflows last week, with about $1.2 billion of net inflow over five trading days, following the previous week net inflow of over $1 billion. BTC Spot ETFs have now seen net inflows for 10 consecutive trading days, averaging over $200 million per day. Notably, Tuesday saw net inflows exceeding $400 million, while Friday recorded about $385 million.
This significant influx has brought the cumulative net inflow for BTC Spot ETFs to $17 billion since inception, setting a new all-time high. Trading volumes are also on the rise, with cumulative volume now totalling over $335 billion, including $11 billion in the last week alone, averaging around $2.2 billion daily. This high trading volume is notable given that July and August typically see low activity in traditional finance markets, marking the highest weekly average daily volume since April.
Turning to Ethereum (ETH), ETH Spot ETFs are set to start trading tomorrow (July 23rd), as confirmed by the Chicago Board Options Exchange (CBOE) on Friday. The CBOE will list several ETH Spot ETFs, including those from VanEck, Franklin Templeton, Fidelity, 21Shares, and Invesco.
Similar to the BTC Spot ETFs launch, issuers of ETH Spot ETFs are competing to offer the lowest possible management fees to attract early inflows. Management fees range from 0.15% (Grayscale Ethereum Mini Trust) to 0.25% (Fidelity, Blackrock, and Invesco). This fee competition is crucial as early inflows can secure high assets under management for 1-3 years, given the long-term investment horizons of many ETF investors.
It’s important to note that Grayscale Ethereum Trust (ETHE), which has been trading for years without redemption options for investors, may experience net outflows similar to those seen with Grayscale Bitcoin Trust (GBTC) when BTC Spot ETFs launched. ETHE will be a separate product from the new Grayscale ETH Spot ETFs (Ethereum Mini Trust), and initial strong outflows from ETHE may offset net inflows to the new products, following the pattern observed with BTC in January.
Overall, market participants expect strong interest in ETH Spot ETFs and significant inflows in the first 3-6 months post-launch. It will be crucial to compare net inflows to those of BTC, considering the different market capitalisations, to gauge the appetite of traditional finance investors for digital assets beyond Bitcoin.
