The emergence of cryptocurrency ETFs is revolutionizing the way investors engage with digital assets. This year has seen significant developments in this space, with the SEC approving 11 Bitcoin Spot ETFs on January 10. Furthermore, the first Ethereum Spot ETF began trading on July 23. Since these milestones, crypto ETFs have experienced substantial inflows and outflows.
Bitcoin Spot ETFs Experience Significant Outflows
Between August 30 and September 6, Bitcoin Spot ETFs witnessed consistent outflows. During this period, the BTC ETFs suffered a cumulative outflow of approximately $1.2 billion. The most substantial outflow occurred on September 3, amounting to $287.78 million.
Ethereum ETFs Follow Suit with Substantial Outflows
Similarly, Ethereum Spot ETFs recorded outflows totaling around $215 million between August 15 and September 9. Like Bitcoin, the largest outflow for Ethereum occurred on September 3, with an amount of $47.40 million. The widespread investor pullback can largely be attributed to the notorious “fear of September.”
Fear of September Triggers Investor Pullback
Historically, September has been a bearish month for Bitcoin and the broader crypto market over the past decade. This recurring trend has instilled a sense of caution among investors, leading to significant outflows. Despite these outflows, crypto ETFs continue to perform better than many other funds. Impressively, out of the 400 new ETFs launched in 2024, Bitcoin Spot ETFs occupy the top four positions.
Outflows Break as Inflows Return to BTC ETFs
The trend of outflows came to a halt on September 9 when Bitcoin Spot ETFs received an inflow of $28.72 million, followed by a substantial $116.96 million on September 10. Conversely, Ethereum ETFs broke their outflow streak on September 10, experiencing a positive net flow of $11.44 million.
Presidential Debate’s Impact on Crypto Market
Interestingly, apart from GBTC, BTC (Grayscale), and BTCO (Invesco) funds, all nine BTC Spot ETFs are trading at a premium. The scenario is similar for Grayscale’s ETH ETFs, with ETHE and ETH trading at discounts while other ETH funds are at a premium. Experts suggest that the announcement of the first presidential debate between Vice-President Kamala Harris and former President Donald Trump contributed to breaking the outflow streak. During the debate, Bitcoin’s price, which was around $57,700, dipped by 1.85% and then took a further dive of 1.03% to settle at $56,000. This drop was likely due to the absence of any discussion on cryptocurrency, which many had anticipated.
Crypto ETFs Remain Strong Amid Market Volatility
Despite market volatility, crypto ETFs have demonstrated resilience. A positive crossover between the MA 100 and 200 on an hourly chart provided support, preventing further price declines. Crypto ETFs are already outperforming other funds in the market, reinforcing the perception of Bitcoin as “digital gold” and a reliable store of value. Investors are now looking towards the upcoming U.S. elections, hoping for a pro-crypto President to foster a more favorable regulatory environment for digital assets.
