Struggles for Cryptocurrency ETFs after Recent Market Crash
Following last week’s significant downturn in the cryptocurrency market, US-based Bitcoin (BTC) and Ethereum (ETH) exchange-traded funds (ETFs) are facing severe outflows as investor confidence plummets.
- The total net asset value of the US Spot Bitcoin ETF is currently at $157.18 billion, accounting for 6.81% of Bitcoin’s overall market capitalization.
- Bitcoin’s trading price sits at $111,900, while Ethereum trades just above $4,000.
- The US Spot Ethereum ETF has a net asset value of $28.75 billion, which represents 5.56% of Ethereum’s market capitalization.
In the wake of the market crash, Bitcoin ETFs experienced daily outflows of $326.52 million as of October 13, according to SoSoValue data. This marked the second consecutive day of outflows, bringing the total to $331.02 million. The market appears to be struggling, with Bitcoin down 10% over the week.
Remarkably, amidst the widespread outflows, only one fund—the iShares Bitcoin Trust (IBIT) from BlackRock—saw net inflows, totaling $60.36 million per day. IBIT remains the leading BTC ETF, accumulating total net inflows of $65.32 billion to date, with net assets at $93.11 billion.
Before the crash, this Bitcoin fund had actually raked in over $2.7 billion in weekly net inflows, a little down from the previous week’s $3.24 billion. However, after the recent outflows, October’s total net inflows were reduced to $4.68 billion—the most substantial since July.
On the Ethereum side, the ETF recorded a notable daily net outflow of $428.52 million, also on October 13. This was the third straight day of outflows, totaling $611.89 million.
Ethereum funds are increasingly encountering significant and consistent outflows. In the worst-case scenario, the ETH ETF could see peak outflows around $450 million before gradually declining. Currently, October’s flow stands at $681.14 million, still showing a positive balance. However, if the withdrawal trend continues, the potential for further gains this month could be at risk.
