Bitcoin & ETH ETFs Trade Fortunes as Confidence Shaken

• Spot Bitcoin and Ethereum exchange-traded funds are struggling to maintain a positive momentum.
• Ether ETFs have recently broken their inflows streak.
• Bitcoin critic Peter Schiff expects the worst for the ETFs. 

The crypto market recently experienced a shake-up triggered by diverse macroeconomic factors, resulting in a downward momentum for most assets. With market giants like Bitcoin (BTC) and Ethereum (ETH) impacted, the negative momentum extended to spot exchange-traded funds, leading to a cascade of liquidations among issuers. 

Despite the broader market showing signs of recovery, the ETFs continue to struggle with instability.

Bitcoin and Ethereum ETFs Flip Flows

A negative trend of fluctuating inflows and outflows has troubled the U.S. Bitcoin and Ethereum ETFs over the past week, evidenced by their inability to maintain a positive trajectory. According to SosoValue data on Wednesday, August 7, 2024, Ethereum ETFs recorded a net outflow of $27.68 million.

The outflows broke the positive streak the issuers had managed to uphold for two days, which saw a combined $147 million in inflows across the funds. While the latest outflows were primarily concentrated in Grayscale’s ETF ETHE with $31.86 million, only a few of the other issuers managed to clamp minor gains.

Contrastingly, Bitcoin ETFs recorded inflows totaling $45.1 million within the same period. While the funds were partially offset by Grayscale’s GBTC with outflow of $30.58 million, BlackRock’s IBIT led the charge strongly with $52.52 million, followed by WisdomTree’s BTCW with $10.50 million. Grayscale’s BTC also recorded approximately $9.71 in inflows, as well as Bitwise’s BITB with a total of $2.99 million. The overall value represents a positive trend for the ETFs, marking the first significant inflows for issuers in a while.

Despite these week-long fluctuations, Bitcoin critic Peter Schiff anticipates that the negative trend of underperformance will continue.

Schiff Warns of Looming ETF Downturn

Following the recent crypto market crash, traditional economist and anti-crypto activist Peter Schiff resumed his campaign against the industry.

Schiff was particularly critical of Bitcoin and Ether ETFs, questioning their long-term viability. Despite the extent of the market turmoil and its impact on the funds, the crypto critic argued the disruption hasn’t been severe enough to erode investor confidence.

Schiff added that a further decline in assets will likely trigger a downward spiral for the ETFs, emphasizing that investors in these funds often have low conviction and a short-term focus, making them less likely to remain committed when the market becomes turbulent.

On the Flipside

• At press time, Bitcoin is trading at up $59,604, up approximately 20% from its low point of $49,300 during the market downturn.
• The total net asset value of Bitcoin ETFs has fallen below $50 billion, currently at  $49.82 billion. 
• US spot exchange-traded funds are still relatively new, making it challenging to predict their future performance with certainty.

Why This Matters

The performance rollercoaster of Bitcoin and Ethereum ETFs marks a significant deviation from the initial expectations set when they were first launched. Regardless of the negative speculation from Peter Schiff, the funds will need to regain and maintain a positive trajectory to restore investor confidence.

Discover more about how Ethereum ETFs performed before retreating to negatives:
Ether ETFs See Second Highest Inflow Day Despite Market Crash

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