Cryptocurrency ETF Weekly | 701 New Funds Added Holding Bitcoin Spot ETFs in Q2

*Organizer: Fairy, * ChainCatcher

Editor: Marco, ChainCatcher

Performance of Crypto Spot ETFs Last Week

From August 12 to 15, global Bitcoin spot ETF holdings decreased by 2,093 BTC. Grayscale's GBTC remains the main force behind the reduction, with holdings down by 2,572 BTC. Germany and Hong Kong continued the outflow trend from the previous week, with outflows of 318 BTC and 240 BTC, respectively.

Additionally, BlackRock's crypto ETF on-chain holdings have surpassed Grayscale for the first time, making BlackRock ETF the largest holder among all ETF issuers, with approximately $21.6 billion worth of ETH and Bitcoin.

Data from @Phyrex_Ni

Net Inflow of $32.4 Million for US Bitcoin Spot ETFs

Last week, US Bitcoin spot ETFs saw a net inflow of $32.4 million, with a net outflow of $81.4 million on August 14, while the rest of the time was net inflow.

Last week, Fidelity's FBTC outperformed BlackRock's IBIT, with FBTC seeing a net inflow of $82.1 million and IBIT a net inflow of $71.1 million. Four ETFs had zero inflow and outflow, with only Grayscale's GBTC experiencing a net outflow of $195 million, bringing its net asset value down to $13.69 billion.

Source: Farside Investors

Net Outflow of $14.1 Million for US Ethereum Spot ETFs

Last week, US Ethereum spot ETFs experienced a net outflow of $14.1 million. The selling pressure on Grayscale's ETHE gradually eased, with a net outflow of $118 million. VanEck's ETHV saw its first net outflow of $7.7 million.

The purchasing power for Ethereum spot ETFs remains insufficient, with BlackRock's ETHA showing weak accumulation, resulting in a net inflow of $76.3 million, only 40% of the previous week's inflow. The other five Ethereum spot ETFs had a total net inflow of only $35.4 million.

Source: Farside Investors

Decreased Liquidity for Crypto ETFs in Hong Kong

Last week, liquidity for crypto ETFs in Hong Kong significantly decreased, with Bitcoin spot ETF net asset value dropping by $13.92 million. On August 13, there was a net outflow of 248 BTC, and on August 15, a net inflow of 8.02 BTC, with zero subscription activity for the rest of the week.

The performance of Ethereum spot ETFs was even more lackluster, with no net inflow or outflow throughout the week.

Data: SoSoValue

Overview of Crypto ETF Dynamics Last Week

Major institutions submitted 13-F filings, disclosing their Bitcoin ETF holdings for the second quarter. 701 new funds have added Bitcoin spot ETFs to their holdings. Institutional investors' purchases of Bitcoin ETFs increased by 27%, primarily focused on BlackRock's IBIT and Fidelity's FBTC.

Bitwise Chief Information Officer Matt Hougan summarized the Bitcoin ETF holdings for the second quarter:****

• Institutional accumulation trend continues: In the second quarter, 1,924 institutions held Bitcoin spot ETFs, an increase of about 30% from 1,479 in the first quarter. Considering Bitcoin's price drop in the second quarter, this growth is quite impressive.
• Most institutional investors are diamond hands: Most institutions that allocated to Bitcoin ETFs in the first quarter chose to continue holding or increase their positions in the second quarter. Among them, 44% increased their holdings in the second quarter, 22% remained unchanged, 21% reduced their positions, and only 13% exited completely.
• Hedge funds remain the main players: Most of the top holders of Bitcoin ETFs are mainstream hedge funds, including Millennium, Schonfeld, Boothbay, Capula, etc. Additionally, there are many advisory firms, family offices, and select institutional investors involved. Over time, it is expected that the proportion of wealth management firms and pension funds will gradually increase.

NASDAQ and NYSE withdrew their applications for listing Bitcoin and Ethereum spot ETF options on the same day. Bloomberg analyst James Seyffart expects NASDAQ and NYSE to resubmit applications for listing Bitcoin spot ETF options in the coming days or weeks.

Other exchanges also withdrew similar applications last week. MIAX, MIAX Pearl, and BOX Exchange withdrew their proposals for listing Bitcoin spot ETF options, and the Chicago Board Options Exchange also withdrew its application for Bitcoin spot ETF options but later resubmitted it.

New Crypto ETFs

The US SEC approved the first leveraged long MicroStrategy ETF.

Franklin Templeton submitted an S-1 application for a new crypto index ETF, which will track the performance of the CF Institutional Digital Asset Index, currently consisting only of Bitcoin and Ethereum.

Views and Analysis on Crypto ETFs

Coinbase: Institutional Holdings of Bitcoin ETFs Increase and Are Expected to Continue Growing

According to a report released by Coinbase on August 16, the proportion of institutional holders marked as "investment advisors" rose by 3% in the second quarter of 2024, currently accounting for 9% of total institutional investments.

Coinbase stated that as more brokerage firms complete due diligence on these funds, the proportion of investment advisors holding spot Bitcoin ETFs is likely to further increase.

Vanguard's New CEO: No Plans to Launch a Cryptocurrency ETF

Vanguard's new CEO Salim Ramji stated in an interview that the company has no plans to launch a cryptocurrency ETF.

Salim Ramji took over as Vanguard CEO last month after a decade in senior leadership roles at BlackRock. Previously, Ramji was the global head of iShares and index investing at BlackRock, responsible for managing a significant portion of the company's client assets and developing the iShares platform. Vanguard is the second-largest asset management company in the world, with over $9 trillion in assets under management.

OSL Executive Director: Hong Kong Crypto ETFs Face Systemic Market Barriers, General Lack of Incentives for ETFs

Gary Tiu, Executive Director and Head of Regulatory Affairs at Hong Kong cryptocurrency exchange OSL, stated that as the Hong Kong ETF market continues to develop, there are increasing opportunities for active participants to drive its growth potential. Although intermediaries in the Hong Kong market currently focus more on non-listed products, the spot crypto ETFs in Hong Kong provide investors with a reliable channel for participation and lay the foundation for future market development.

Additionally, Tiu stated, "Overall, Hong Kong still holds a negative attitude towards Bitcoin, Ethereum, and cryptocurrencies. I believe there are still some biases in the eyes of regulators and financial institutions, who view Bitcoin ETFs as a unique risk category that requires extra caution."

Chen Zhao, Director of Digital Assets at Fosun Wealth, mentioned that Hong Kong's crypto ETFs also lack a sufficient number of dealers and brokers.