Bitcoin ETFs End Three-Day Outflow Streak
Bitcoin exchange-traded funds (ETFs) in the United States recorded a net inflow of $253.6 million on October 11, breaking a streak of three consecutive trading days of outflows. This inflow came as BTC rallied to a local high of $63,360 before settling around $62,530.
The Fidelity Wise Origin Bitcoin Fund recorded the highest inflows of $117.1 million, leading all other ETFs for the day. ARK 21Shares Bitcoin ETF followed closely behind with $97.6 million, as per Farside Investors’ data.
Bitwise Bitcoin ETF also experienced its largest inflow in 11 trading days, bringing in $38.8 million. Other Bitcoin ETFs, including Invesco Galaxy and VanEck, contributed to the overall inflow.
Despite the positive movement across these funds, BlackRock’s iShares Bitcoin Trust (IBIT) recorded no flow for the day, as did the Bitcoin ETFs from Franklin Templeton, Valkyrie, and WisdomTree.
BlackRock’s IBIT Saw Zero Flow
October 11 marked the third-largest inflow day for US Bitcoin ETFs without any contribution from BlackRock’s IBIT, a key player in the space. Meanwhile, the Grayscale Bitcoin Trust saw another day of outflows, losing $22.1 million.
Regardless, BlackRock continues to dominate the Bitcoin ETF landscape, with total net inflows reaching $21.7 billion. Fidelity is also on the verge of hitting the $10 billion milestone, being $15 million short.
ARK 21Shares and Bitwise are the only other two Bitcoin ETF issuers with more than $2 billion in net inflows. So far, all US spot Bitcoin funds have accumulated $18.9 billion in net inflows despite significant outflows from the Grayscale Bitcoin Trust.
Ethereum ETFs Struggle with Low Demand
Meanwhile, Ethereum ETFs continue to struggle. Seven out of nine US-based Ether ETFs recorded zero inflows on October 11. The net flow for the day was $0.1 million, with all inflows from the Fidelity Ethereum Fund.
Grayscale’s Ethereum Trust suffered another loss of $8.7 million. Additionally, the 21Shares, VanEck, and Invesco-issued Ether ETFs have noted eight consecutive days of zero inflows, highlighting the contrasting demand for Bitcoin and Ethereum ETFs.
Meanwhile, the continuous outflow of Ether funds has raised concerns among industry experts. Some analysts suggest the lukewarm reception to Ether ETFs may be due to the timing of their launch.
Other analysts believe the highly technical nature of Ethereum’s roadmap could be deterring Wall Street investors from fully understanding its value. Bitstamp’s CEO for the Americas, Bobby Zagotta, remarked that general market uncertainties are also a contributing factor.
SEC Delays Decision on Spot Ethereum ETF Options Again
According to an October 11 filing, the United States Securities and Exchange Commission (SEC) has once again delayed a decision on allowing options tied to spot Ethereum (ETH) exchange-traded funds (ETFs). The delay pushes the decision date from October 19 to December 3, extending the uncertainty for investors looking to trade options on spot ETH ETFs.
The Cboe Exchange had requested permission to list options on several spot Ethereum funds, including major names like Fidelity Ethereum Fund, BlackRock’s iShares Ethereum Trust ETF, Grayscale Mini Ethereum Trust, and Grayscale Ethereum Trust.
Bitcoin ETF Options’ Progress
In September, the SEC approved Nasdaq’s request to list options on BlackRock’s iShares Bitcoin Trust (IBIT). However, the final listing of these options is still awaiting clearance from the Commodity Futures Trading Commission (CFTC) and the Options Clearing Corporation (OCC).
Options tied to Bitcoin ETFs are expected to hit the market by early 2025. James Seyffart, an analyst with Bloomberg Intelligence, suggested that options on Bitcoin ETFs could launch as soon as the first quarter of next year.
However, he added that there’s a slim chance they might debut before the end of 2024. The repeated delays on Ethereum products indicate a slower regulatory path for Ethereum-based ETFs
Significance of Crypto ETF Options
Options are financial instruments that grant the holder the right to buy or sell an asset at a predetermined price, providing flexibility and potential safeguards for investors against market volatility. In the case of crypto ETFs, regulated exchanges and the OCC protect traders by mitigating counterparty risks.
This is a significant advancement for the crypto market, offering new opportunities for retail and institutional investors. Jeff Park, a top-level executive at Bitwise Invest, described the listing of crypto options on regulated exchanges as a “monumental advancement” for the market.
Notably, financial advisers, who manage a substantial share of investments in the $9 trillion ETF market, increasingly rely on options to shield portfolios from abrupt market changes. A recent survey by The Journal of Financial Planning noted that over 10% of financial advisers actively used options in 2023 to manage risk in their clients’ portfolios.
