According to Farside Investors, on Tuesday, 11 cryptocurrency ETFs in the U.S. market saw the largest outflow of funds since May 1, exceeding $287 million. These ETFs were approved for listing in January, benefiting from the Securities and Exchange Commission (SEC) allowing financial companies to include Bitcoin in ETF products, similar to packaged stocks and bonds.
Among them, Fidelity's FBTC fund saw the highest redemption amount, with investors selling over $162 million worth of shares on Tuesday. Since converting its trust fund to an ETF in January, Grayscale has seen total net outflows exceeding $19.8 billion, with a net outflow of $50.4 million on Tuesday. The Ark 21Shares ETF had redemptions totaling $33.6 million, and Bitwise's BITB product was also sold off with ETFs valued at $25 million.
Despite Bitcoin ETFs setting records in the ETF market upon their launch, investor enthusiasm has significantly cooled in recent months. Currently, the total assets under management for Bitcoin spot funds are approximately $52.6 billion, down by $10 billion from their peak.
The outflow of funds was mainly influenced by the drop in Bitcoin prices. Bitcoin briefly surpassed its historical high of $73,000 in March, but has since fallen to around $58,400. On Tuesday, Bitcoin's price dropped nearly 3%, with the stock market also declining as weak manufacturing data sparked concerns about economic slowdown. This marked the fifth consecutive day of redemptions for all spot ETFs.
Spot Ethereum ETFs, launched since July, are also facing difficulties. On Tuesday, Ethereum's price plummeted nearly 6%, leading to significant redemptions in related ETFs. JPMorgan analysts pointed out that the main reason for the fund outflows was Grayscale's sell-off, with investors selling over $52 million worth of ETHE product shares.
Overall, market fund inflows remain weak. Except for Fidelity's spot Ethereum product, which recorded an inflow of $4.9 million, other funds showed lackluster performance. The total assets under management for spot funds have dropped from $10.2 billion in July to approximately $6.7 billion.
As of the end of the second quarter, Wall Street banks and hedge funds remained the main buyers of Bitcoin ETFs. Purchasing data for Ethereum ETFs will be disclosed in the next report.
A report by H.C. Wainwright analysts indicated that by the end of this quarter, institutional holdings of Bitcoin spot ETFs accounted for 24% of the total. During this period, Goldman Sachs made its first foray into the crypto ETF market, purchasing $418 million worth of Bitcoin funds.
Morgan Stanley had already started allocating Bitcoin spot ETFs earlier, but saw some reductions in the most recent quarter. Of the $1.5 trillion in assets it manages, holdings in Bitcoin spot ETFs have declined from approximately $270 million in the previous quarter to $189 million.
