In an unexpected turn of events, U.S. spot bitcoin exchange-traded funds (ETFs) faced a net outflow of approximately $94 million in August. This shift to negative territory followed an encouraging trend of eight consecutive days of positive inflows earlier in the month.
Despite experiencing a peak net inflow of over $250 million on August 23, the positive momentum was overshadowed by a significant loss of $237 million on August 2, marking the worst day for spot bitcoin ETFs in August, according to data from SoSoValue.
bitcoin-price-leads-to-drop-in-assets-held-by-btc-funds">Decline in bitcoin Price Leads to Drop in Assets Held by BTC Funds
As bitcoin's price declined from earlier highs in August, the total net assets held by all commercially available bitcoin funds decreased by $4.24 billion, reaching around $53.8 billion by the month's end. The latter part of the month witnessed a reversal in fortunes, with net outflows surpassing inflows.
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 August, several funds reported zero net inflows, with Grayscale's GBTC seeing the largest outflow of $70 million.
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 front, spot Ether ETFs also faced challenges, recording no significant inflows or outflows on the last trading day of August.
Despite initially logging over $1 billion in trading volume during their debut in July, spot ether ETFs experienced a gradual decline in activity, with a cumulative net outflow of $477.25 million since their launch, as reported by SoSoValue.
Spot Ether ETFs Was Expected to Perform Poorly
Ether spot ETFs have struggled with net outflows since their U.S. launch last month, contrasting the performance of spot bitcoin ETFs. According to a recent JPMorgan research report, Ether ETFs faced around $500 million in net outflows in the first five weeks post-launch, while bitcoin ETFs attracted inflows exceeding $5 billion.
JPMorgan's analysts attributed the weak performance of ether ETFs to bitcoin's "first-mover advantage," the lack of staking options, and lower liquidity, making ether ETFs less appealing to institutional investors. Additionally, there was a surprising $2.5 billion in outflows from Grayscale's ethereum Trust (ETHE).
Despite expectations of around $1 billion in outflows as ETHE transitioned to a spot ETF, Grayscale's introduction of a mini ether ETF only managed to attract $200 million in inflows, further underscoring the challenges faced by spot Ether ETFs.
