Cryptocurrency ETF Weekly | Last week, the net inflow of Bitcoin spot ETFs in the U.S. was $1.1 billion, and Bank of New York Mellon received SEC approval for cryptocurrency custody services

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Last Week's Crypto Spot ETF Performance

From September 23 to 26, global Bitcoin spot ETF holdings increased by 9,100 Bitcoins. Excluding Grayscale, U.S. Bitcoin spot ETFs added 9,700 Bitcoins, becoming the main source of inflows. Bitcoin spot ETFs in Canada and Germany saw slight reductions in holdings. Overall, this month saw a shift from reductions to increases, with a cumulative addition of 7,013 Bitcoins.

Data from @Phyrex_Ni

U.S. Bitcoin Spot ETF Net Inflow of $1.106 Billion

Last week, U.S. Bitcoin spot ETFs experienced significant inflows, with a net inflow of $1.106 billion. On September 27, the inflow reached a record high for a single day since early June, hitting a nearly four-month peak.

Grayscale GBTC was the only ETF with net outflows, losing $21.8 million. BlackRock's IBIT had the highest inflow, reaching $499 million, ending a two-week period of low liquidity. Meanwhile, BlackRock's Global Allocation Fund also increased its holdings in BlackRock's Bitcoin spot ETF.

Source: Farside Investors

U.S. Ethereum Spot ETF Net Inflow of $85 Million

Last week, U.S. Ethereum spot ETFs saw a net inflow of $85 million. Only Grayscale ETHE experienced net outflows, losing $127.3 million.

BlackRock's Ethereum spot ETF had the highest net inflow, reaching $95.5 million, with its asset size surpassing $1 billion, currently ranking in the top 20% of over 3,700 ETFs, achieving this in just two months.

Source: Farside Investors

Hong Kong Bitcoin Spot ETF Liquidity Remains Weak

Last week, liquidity for Hong Kong crypto ETFs remained weak, with the Hong Kong Bitcoin spot ETF experiencing a net outflow of 15.94 Bitcoins. On September 26, the trading volume for Bitcoin spot ETFs reached $3.42 million, the highest level in nearly ten days.

The Ethereum spot ETF did not see any capital movement, with a total net asset value of $38.91 million. Data for the Ethereum spot ETF on September 25 was not published, which may lead to discrepancies.

Data: SoSoValue

Overview of Last Week's Crypto ETF Developments

The U.S. SEC has postponed its decision on BlackRock and Bitwise's Ethereum spot ETF options trading applications, with the latest deadlines set for November 10 and November 11, respectively. The SEC stated that it needs more time to consider the proposal and has extended the initial 45-day review period.

BNY Mellon has received approval from the U.S. SEC to provide cryptocurrency custody services, with SEC Chairman Gary Gensler stating that BNY Mellon's digital asset custody service structure could be applied to cryptocurrencies beyond Bitcoin and Ethereum ETFs.

Gensler noted that BNY Mellon's proposed structure includes the use of individual crypto wallets, each with a separate bank account, and prohibits mixing with bank assets.

Views and Analysis on Crypto ETFs

Analyst: Bitcoin Spot ETF Options May Affect Demand for Underlying Assets

The U.S. Securities and Exchange Commission (SEC) recently approved BlackRock to list and trade its spot Bitcoin options. CryptoQuant analysts pointed out that "the launch of options on the IBIT ETF may increase the 'paper' supply of Bitcoin, as institutional investors can gain exposure to Bitcoin without directly purchasing it. Options on the spot Bitcoin ETF mean that the 'paper' supply of Bitcoin will increase, allowing institutional investors to gain exposure to Bitcoin through buying and selling options without investing in the spot market. They can hold long positions in Bitcoin through options without actually buying Bitcoin, or short options without first purchasing Bitcoin."

Derivatives trader Gordon Grant discussed the impact of this trend and drew parallels with the gold market. He emphasized that while "paper" trading constitutes a significant portion of total trading volume, real demand is still needed to support this supply. He stated, "Although paper gold trading occupies a significant share of total daily trading volume, the same is true for spot trading. While the open interest in the paper market may increase significantly, at some point, the paper supply will inevitably require paper demand, which involves real support."

Chairman of the Hong Kong Securities and Futures Commission: The First Batch of Virtual Asset ETFs Exceeds $300 Million in Market Value, Exploring More Tokenization Use Cases

During an event, Chairman of the Hong Kong Securities and Futures Commission, Leung Tin-leung, stated that the first batch of virtual asset spot exchange-traded funds (ETFs) in Hong Kong has been operating smoothly since their listing in April, with a current market value exceeding $300 million. With the launch of the first Asian virtual asset futures ETF product, retail investors can manage related risks, and he believes that innovative products can drive the Hong Kong financial market forward.

Leung emphasized that Hong Kong, as a financial center, needs to continue enhancing resilience through innovative technologies and sustainable finance. He noted the potential advantages of blockchain technology, such as reducing transaction costs, and highlighted that asset and securities tokenization could become a major use case. Currently, they are closely collaborating with the Hong Kong Monetary Authority to explore more different tokenization use cases, aiming to establish a relevant ecosystem.