Investors Pour $654 Million Into Spot Bitcoin ETFs in 3 Days

12 days ago

In the past three trading days, U.S.-listed spot Bitcoin ETFs have seen an influx of over $650 million. Despite these impressive investments, Bitcoin's price is still below $60,000. This might be due to the fact that the German government continues its massive Bitcoin sell-off, putting even more pressure on the market. Meanwhile, competition among asset managers for the upcoming launch of spot Ethereum ETFs is driving down fees. Bitwise’s chief compliance officer believes that the launch of spot ETH ETFs are very close. 

US Bitcoin ETFs Receive $650 Million Boost

Over the past few days, investors have funneled more than $650 million into United States-listed spot Bitcoin exchange-traded funds (ETFs). This surge in investments happened over three trading days starting from July 5. 

On July 9 alone, the 11 spot Bitcoin ETFs saw impressive net inflows, with BlackRock’s iShares Bitcoin Trust receiving $121 million and Fidelity’s Wise Origin Bitcoin Fund attracting $91 million. In total, net inflows across all U.S.-based spot Bitcoin ETFs for that day amounted to $216.4 million, equivalent to 3,760 Bitcoin, according to Farside Investors.

The inflows for July 9 came after investments of $294.8 million on July 8 and $143.1 million on July 5, culminating in a total of $654 million over the past three trading days. 

Bitcoin ETF flow table (Source: Farside)

Despite these robust inflows, Bitcoin's price has struggled to breach the $60,000. At press time, BTC was trading at $58,514.60 after its price managed to climb by 1.79% over the past 24 hours, according to CoinMarketCap. However, BTC’s price was still down by more than 15% on its weekly time frame.

Analysts are optimistic that the ETFs could give Bitcoin's price a boost, similar to the pattern seen before March when Bitcoin reached a new all-time high. Sina G, co-founder and COO of Bitcoin custody consultancy firm 21st Capital, pointed out that the price surge from $16,000 to $73,000 was hugely influenced by ETF activities, driven by a "buy-the-rumor buy-the-news" phenomenon. 

German Government Prepares to Sell Even More BTC

Inflows to US Bitcoin ETFs have not been enough to outpace the recent Bitcoin selling spree from Germany’s Bundeskriminalamt. Unfortunately, it does not seem like the situation is getting any better either.

The wallet labeled German Government (BKA) on Arkham Intelligence recently loaded up an additional 6,000 Bitcoin, valued at $354 million, in preparation for the next series of sell-offs. To date, a total of 5,853.409 Bitcoin has been sent to addresses linked with exchanges like Coinbase, Kraken, Flow Traders, and other unidentified addresses. The next attempt to offload about $342 million worth of Bitcoin has started.

This ongoing sell-off comes after a previous outflow of 3,100 BTC, valued at $178 million at the time, on July 9. Additionally, the address withdrew 1,700 BTC worth $91.78 million from Bitstamp, suggesting that the German government was unable to offload the Bitcoin on the exchange. 

On July 9, the wallet's holdings were around 26,000 BTC, approximately worth $1.5 billion. As of July 10, the wallet's current holdings have decreased to around 18,110 BTC.

Invesco, Galaxy Set Competitive Fees for Upcoming ETH ETFs

There have been some new developments with regards to spot Ethereum ETFs as well. On July 9, asset managers Invesco and Galaxy set management fees for the Invesco Galaxy Ethereum ETF (QETH) at 0.25% in an amended filing to U.S. regulators. This could suggest that competition between the hopeful ETF sponsors is increasing ahead of the expected rollout of these investment vehicles later this month. 

Invesco’s fees are slightly higher than those of competitors VanEck and Franklin Templeton, which plan to charge 0.20% and 0.19%, respectively, according to their S-1 registrations. On the bright side, this competition among fund managers is driving down fees for investors.

All three fund sponsors offer way lower fees compared to Grayscale’s Ethereum Trust (ETHE), a closed-end fund that was launched in 2017. Grayscale also plans to launch its own spot Ethereum ETF, the Grayscale Ethereum Mini Trust (ETH), but has not shared its management fees just yet.

Bitcoin investors benefited from similar competition among fund managers after the approval of BTC ETFs by U.S. regulators back in January. About half of the BTC ETFs on the market have reduced or temporarily waived management fees to attract more investor funds.

While none of the S-1 registrations specify a start date for listings, industry analysts predict that spot ETH ETFs could begin trading as early as this month.

Additionally, on July 8, the Chicago Board Options Exchange (CBOE) filed applications to list VanEck and 21Shares’ proposed spot Solana ETFs on its exchange platform. U.S. regulators are expected to decide on these funds by March 2025.

None of the proposed spot crypto ETFs currently include staking, mostly because of  resistance from the SEC, prompting several top fund sponsors, including Ark Investments Management and Fidelity Investments, to remove staking plans from their proposed spot ETH ETFs.

ETH ETF Launch ‘Close’ 

A roster of eight United States-based spot ETH ETFs are nearing launch, though an exact date is still uncertain. Katherine Dowling, Bitwise’s chief compliance officer, believes that the S-1 amendments show fewer issues being negotiated with the SEC, indicating that the launch is very close. 

Form S-1s provide necessary information about the issuer and the securities they plan to offer, and once approved, the products can launch.

Meanwhile, U.S. SEC Chair Gary Gensler recently suggested that the spot ETH ETFs might launch sometime this summer. Dowling pointed out that people’s definitions of summer vary, and issuers have been waiting through a long, hot period for their approvals. Several spot ETH ETF issuers have been awaiting SEC approval for six weeks after the regulator signed off on several 19b-4 filings on May 23. The issuers submitted their amended S-1s in early July after initial feedback from the SEC.

Bitwise’s chief investment officer, Matt Hougan, speculated that the spot ETH ETFs could attract up to $15 billion in inflows in the first 18 months of trading, mirroring the inflows seen by spot Bitcoin ETFs since their launch about six months ago.

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