spot Bitcoin Exchange-traded funds (ETFs) had their worst day in four months on Tuesday as investors pulled out their money, adding to a broader market sell-off.
More than $287 million was withdrawn from 11 U.S.-listed ETFs, the biggest outflow since May 1. According to data from Far Side Investors:The fund hit the market in January following a ruling by the SEC allowing financial companies to include bitcoin in ETFs in the same way they do with stocks and bonds.
Fidelity led the redemptions, with investors selling more than $162 million in shares in its FBTC fund on Tuesday. Grayscale, which has seen net outflows of more than $19.8 billion since converting the trust into an ETF in January, saw outflows of $50.4 million. A fund issued by Ark21Shares saw outflows of $33.6 million, while investors sold $25 million worth of shares in Bitwise’s BITB offering.
Much of the initial enthusiasm around a Bitcoin ETF has become a blockbuster hit and dissipated over the past few months. A record-breaking debut For the ETF market. The Spot Bitcoin Fund currently has approximately $52.6 billion in total assets under management. $10 billion down from peak.
Most of the decline was driven by a drop in bitcoin’s price, which hit a record of over $73,000 in March before dropping to around $58,400.Bitcoin fell about 3% on Tuesday, a day when weak manufacturing data stoked concerns of an economic slowdown and stocks also fell.It marked the fifth consecutive day of redemptions across spot funds.
The Spot Ethereum ETF, which launched in July, has also been through a tough few months, with the cryptocurrency plummeting by around 6% on Tuesday, leading to outflows from the associated ETF. J.P. Morgan Analysts noted that the redemptions were “fully driven by Grayscale” as investors sold more than $52 million worth of shares in the company’s ETHE product.
Overall, inflows were muted. With the exception of $4.9 million inflows into Fidelity’s spot Ethereum product, other funds were flat for the day. Total assets in spot funds fell to about $6.7 billion from $10.2 billion in July.
As of the end of the second quarter, Wall Street banks and hedge funds were buying Bitcoin ETFs. Data on Ethereum ETF purchases will not be made public until the next filing.
According to a note from HC Wainwright analysts, quarterly disclosures to the SEC showed that institutional holdings of the Spot Bitcoin ETF rose to 24% by the end of the quarter.
Goldman Sachs entered the crypto ETF market around the same time, purchasing a Bitcoin fund worth $418 million.
Morgan Stanley has held the stock for some time, but reduced it in the latest quarter. The investment bank has $1.5 trillion in assets under management. Equivalent to $189 million Spot Bitcoin ETF assets were down from about $270 million in the previous quarter.
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