Bitcoin and Ethereum Net Flows: What Do ETFs Reveal About Investor Preferences?” />
ETFs of Bitcoin (CRYPTO: BTC) have accumulated a staggering total of $18.08 billion in cumulative net flows as of August 26, while BTC ETFs have Ethereum (CRYPTO: ETH) have seen net flows of $477.88 million since inception.
What happened
This contrast in fund flows highlights a clear preference among institutional investors, with Bitcoin ETFs controlling a total of $58.47 billion in net assets versus Ethereum’s $7.46 billion.
The latest data reveals that on August 26 alone, Bitcoin ETFs saw a daily flow of $224.06 million, driven primarily by the Bitcoin ETF fund. BlackRock (NASDAQ:IBIT), according to data from SoSo Value.
In stark contrast, Ethereum ETFs saw a net outflow of $13.23 million on the same day, with the Ethereum fund (NYSE:ETHE) Grayscale leading the exodus with $9.52 million, the data shows.
To put the figures into context, Matteo Grecoanalyst of Fineqia Internationalsaid that Bitcoin spot ETFs have recorded eight consecutive days of positive inflows and have for the first time surpassed $18 billion in net inflows since inception, setting a new all-time high, while ETH spot ETFs have recorded eight consecutive days of net outflows, indicating an opposite sentiment in recent weeks.
The disparities go beyond mere flows of funds.
Trading volumes tell a similar story about the two markets.
Bitcoin ETFs traded roughly $7.6 billion last week, with BlackRock’s IBIT leading the way with $704.81 million on August 26 alone.
Ethereum ETFs, by comparison, saw a total trading volume of $125.73 million on the same day, with Grayscale’s ETHE accounting for $38.90 million.
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Why is it important?
The stark difference in ETF performance between the two major cryptocurrencies raises questions about investor preferences and market maturity.
“The debate over altcoins’ ETF listing in the US started less than a year ago, after BTC spot ETFs started trading. ETH spot ETFs received quick approval, while BTC spot ETFs were under discussion for years before getting the green light,” Greco said.
The historical context partly explains the current panorama.
Bitcoin ETFs benefit from years of pent-up demand and a more established investor base.
Ethereum ETFs, while approved more quickly, are still in the process of building their investor base and proving their value proposition to traditional finance.
Looking at the first 25 trading days of both types of ETFs, the contrast becomes even more apparent.
Bitcoin ETFs have seen 19 days of net inflows and only 6 days of outflows.
Ethereum ETFs, meanwhile, have seen just 8 days of net inflows versus 17 days of outflows.
What’s coming
These topics are expected to be explored in depth at Benzinga’s upcoming The Future of Digital Assets event on November 19.
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