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point Bitcoin Exchange-traded funds had their worst day in more than four months on Tuesday, with investors pulling some money amid a broader market selloff.
11 U.S.-listed ETFs withdrew more than $287 million, the largest single-day outflow since May 1 According to data from Farside Investors. The U.S. Securities and Exchange Commission (SEC) issued a ruling allowing financial firms to package Bitcoin into ETFs, just like stocks and bonds, and the funds went public in January.
Fidelity led redemptions, with investors selling more than $162 million worth of shares in its FBTC fund on Tuesday. Since converting its trust into an ETF in January, Grayscale has seen net outflows exceed $19.8 billion, recording outflows of $50.4 million. Ark 21Shares’ offering saw $33.6 million in outflows, and investors sold $25 million worth of shares in Bitwise’s BITB offering.
With the Bitcoin ETF buzz, the initial enthusiasm has dissipated over the past few months. Breaking records on debut for the ETF market. The current total assets under management of spot Bitcoin funds are approximately US$52.6 billion. $10 billion below peak.
Much of the decline is due to lower Bitcoin prices, which hit an all-time record of more than $73,000 in March and have since fallen to about $58,400. Bitcoin fell nearly 3% on Tuesday, a day of losses for stocks as weak manufacturing data stoked fears of an economic slowdown. This is the fifth consecutive day of redemptions from spot funds.
The spot ether ETF, launched in July, has also had a rough few months. The cryptocurrency plunged nearly 6% on Tuesday, leading to outflows from related ETFs. JPMorgan Chase Analysts noted that redemptions were “entirely driven by Grayscale,” with investors offloading more than $52 million worth of ETHE Products shares.
Overall, funding flows have been tepid. With the exception of $4.9 million flowing into Fidelity’s spot ether product, all other funds were flat on the day. Total spot fund assets 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 buyers of Bitcoin ETFs. Data on Ethereum ETF purchases will not appear until the next round of filings.
According to a report by HC Wainwright analysts, quarterly information disclosed to the SEC showed that as of the end of the quarter, the number of spot Bitcoin ETFs held by institutions had risen to 24%.
Goldman Sachs made its first foray into the crypto ETF market during the same period, purchasing a Bitcoin fund worth $418 million.
Morgan Stanley took an early position but reduced its holdings in the most recent quarter. Of the investment bank’s $1.5 trillion in assets under management, it holds Valued at US$189 million The number of spot Bitcoin ETFs has declined from approximately $270 million in the previous period.
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