Cryptocurrency ETF Weekly Report | Last week, the overall performance of the ETF market was poor, with a net outflow of $341 million in the first week of the Ethereum spot ETF

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Last Week's Performance of U.S. Crypto Spot ETFs

U.S. Crypto Spot ETFs Show Weak Performance, Ethereum Spot ETF Sees Net Outflow of $341 Million in Its First Week

Last week, U.S. crypto spot ETFs showed weak performance, with Bitcoin spot ETFs experiencing a net inflow of $535 million, only half of the previous week's level. On the first trading day of the Ethereum spot ETF, Bitcoin spot ETFs saw a net outflow of $78 million, breaking a streak of 12 consecutive days of net inflows.

A total of 4 Bitcoin ETFs experienced net outflows last week:

• BitWise ETF BITB saw a net outflow of $86.3 million, with a current net asset value of $600 million.
• Ark Invest & 21Shares ETF ARKB saw a net outflow of $49 million, with a current net asset value of $400 million.
• VanEck ETF HODL saw a net outflow of $19.2 million, with a current net asset value of $6.7 billion.
• Grayscale ETF GBTC saw a net outflow of $119 million, with a current net asset value of $18.38 billion.

Since its launch, U.S. Bitcoin spot ETFs have accumulated a net inflow of $17.589 billion, while BlackRock's IBIT has accumulated a net inflow of $19.727 billion; Grayscale's GBTC has accumulated a net outflow of $18.814 billion.

(Note: The funds inflow/outflow data for BRRR was not updated on July 26, which may affect the overall data.)

Source: Farside Investors

Last week, the U.S. Ethereum spot ETF began trading, with a trading volume exceeding $1.11 billion on its first day, which is 24% of the trading volume of the Bitcoin spot ETF on its first day. The Ethereum spot ETF saw a net inflow of $106 million on its first day, but experienced net outflows for the next three days, with a cumulative net outflow of $341 million.

The outflows from the Ethereum spot ETF came from Grayscale's ETHE, which has seen a net outflow of $1.513 billion since its listing. According to data from @Phyrex_Ni, Grayscale's sell-off has reached 16.19%, while the sell-off of GBTC at the same time is only 8.2%. The data indicates that the sell-off rate of ETH is more than double that of BTC. The remaining Ethereum spot ETFs all experienced net inflows, with BlackRock's ETHA seeing the highest inflow of $442 million, followed by BitWise's ETHW with a net inflow of $265 million.

Source: Farside Investors

Hong Kong Crypto ETFs See Net Outflow of 52.15 Bitcoins

Last week, Hong Kong's crypto ETFs turned to a net outflow state, with the Hong Kong Bitcoin spot ETF experiencing a net outflow of 52.1 Bitcoins, and the Ethereum spot ETF seeing zero inflow and outflow. This situation indicates that the market may be in a phase of adjustment and observation.

Currently, the total holdings of various issuers in Hong Kong amount to 12,900 ETH, with a total net asset value of $42.21 million, while the total net asset value of Ethereum for U.S. ETF issuers is $9.24 billion. In comparison, the market size in Hong Kong is significantly smaller.

Overview of Crypto ETF Dynamics Last Week

Last week, two states in the U.S. announced that their pension funds would invest in Bitcoin ETFs.

The Michigan state pension fund purchased 110,000 shares of the ARKB Bitcoin spot ETF in the second quarter, worth approximately $6.6 million.

The pension fund in Jersey City, New Jersey, is updating its filing with the SEC, and the mayor estimates that this process will be completed by the end of summer.

Jersey City Mayor Steven Fulop stated, "The question of whether cryptocurrencies and Bitcoin will continue to exist is essentially over; cryptocurrencies and Bitcoin have won. I have always believed in cryptocurrencies, but broadly speaking, I do believe that blockchain is one of the most important new technological innovations since the internet."

The Bitwise Ethereum ETF banner has risen on the iconic exterior wall of the New York Stock Exchange, marking the official trading of the U.S. Ethereum spot ETF, but the ETH price began to decline after its launch. According to analysis from The DeFi Investor, Bitcoin's price also experienced similar short-term fluctuations after the launch of the Bitcoin spot ETF, hitting a bottom within about two weeks, followed by a few days of consolidation, ultimately reaching an all-time high. Given this, if demand for the Ethereum spot ETF remains high in the coming weeks, the ETH price may also experience a similar bottoming rebound process, provided that the Ethereum ETF can achieve net inflows.

New Crypto ETFs

• Southern Eastern will launch Asia's first inverse Bitcoin ETF in Hong Kong.
• Hashdex plans to establish an ETF based on cryptocurrency indices.
• Nomura's cryptocurrency division plans to launch a higher-yielding alternative to the Ethereum ETF.

Views and Analysis on Crypto ETFs

Quant Fund Kbit: Despite High ETF Returns, We Will Continue to Invest in Cryptocurrencies

Quant fund Kbit stated that while hedge funds are using proven strategies to profit from the recent influx of U.S. Bitcoin and Ethereum ETFs, continuing to invest in the digital asset space will have greater profit potential.

Kbit's founder and CEO Ed Tolson stated that access to centralized cryptocurrency exchanges is essential for participating in token trading, perpetual contracts, and derivatives themselves.

It is reported that Kbit manages over $100 million in assets, employing a market-neutral trading strategy aimed at profiting from both price increases and decreases while seeking to minimize overall market risk.

ETF Store President: Expect Issuers to Apply for a Combination Spot ETF of BTC, ETH, and SOL in the Coming Months

The ETF Store President Nate Geraci stated on social media that he expects issuers to apply for a combination spot ETF of BTC, ETH, and SOL in the coming months, rapidly moving towards index-based and actively managed cryptocurrency ETFs.

QCP Capital: ETH Spot ETF's First Day Performance Was Below Expectations, but Remains Optimistic in the Long Run

Crypto investment firm QCP Capital stated that the highly anticipated Ethereum spot ETF began trading last night; however, the expected enthusiastic market response did not materialize. Ethereum's volatility has decreased across the entire term structure, and the premium of front-end Ethereum volatility relative to Bitcoin has finally reversed, with the trading prices of Bitcoin's 1-week and 2-week options being 1-3 points higher than Ethereum.

QCP Capital expressed optimism about Ethereum's prospects. Bitcoin reached an all-time high two months after the ETF launch, providing a strong precedent. Institutional investor interest is expected to continue, and Ethereum's price trajectory may gradually approach its previous all-time high. As the market stabilizes, Ethereum's volatility is expected to decrease before the weekend. Given that volatility remains at moderate levels, implementing accumulation strategies may be the best way to take advantage of this slow upward trend.

10x Research: The Uptrend Before the Ethereum ETF Launch Has Ended, and the Market Is Experiencing a "Sell the News" Trading Pattern

Research firm 10x Research released a report stating that the uptrend before the Ethereum ETF launch has ended, and the market is experiencing a "sell the news" trading pattern. The report emphasizes the following points:

• The launch of the Ethereum ETF coincides with the start of the Mt. Gox Bitcoin distribution, which may bring selling pressure to the crypto market.
• The earnings season for U.S. tech stocks has started poorly, with 40% of market-cap companies set to report earnings next week, and expectations may be too high.
• Ethereum's fundamentals (new users, revenue, etc.) are stagnating or declining, which may become a weakness for the market.
• Ethereum has dropped 6% since the ETF launch, aligning with the firm's previous bearish expectations.

10x Research believes that if this trend continues, the cryptocurrency market may need more positive support to regain its upward momentum.

Analysis: Bitcoin's Current Decline Is Related to Seasonal Factors, and the Timing of the Ethereum Spot ETF Launch Is Unfortunate

Timothy Peterson, founder of Cane Island Alternative Advisors, linked Bitcoin's current decline to seasonal factors, as historically, Bitcoin tends to perform poorly at this time of year. Peterson stated, "Our research shows that the trend of poor performance for Bitcoin has existed from July 22 to September 22."

Peterson added, "Bitcoin's seasonal pattern appears later in the year, preparing for the subsequent frequent occurrence of 'Uptober.'"

Charles Edwards, founder of Capriole Investments, stated that the launch of the spot Ethereum ETF on July 23 may also affect market sentiment, saying, "If the Ethereum spot ETF had not launched in 2024, the entire market would be better off. Its launch is detrimental to both Bitcoin and Ethereum. Ethereum has been sluggish throughout the cycle, and now it is launching an ETF at the institutional level, muddying the waters."