More demand for BTC than ETH for now

Robert Mitchnick, Head of Digital Assets at BlackRock, said that Bitcoin ETFs are currently attracting more investor demand than Ethereum funds.

The Bitcoin 2024 conference in Nashville, which is expected to attract 20,000 crypto enthusiasts, comes at a time when exchange-traded funds are now offering the opportunity to invest in the biggest cryptocurrencies, Bitcoin (BTC) and Ethereum (ETH).

Spot ETH ETFs are new entrants to the market, but spot BTC ETFs have been trading since January and have accumulated over $60 billion in assets under management, according to SoSoValue. Mitchnick noted that it’s still early days and flows have yet to indicate whether investors will reallocate capital from Bitcoin funds to Ethereum ETFs.

Spot Ether ETFs accounted for 79% of the total day one flows recorded by spot Bitcoin products. Data including Grayscale exits brought that number down to 16% as investors flocked to the firm’s ETHE vehicle. Ethereum responded with a price drop, falling as much as 7% on July 25.

Similar flows occurred when spot BTC ETFs were launched in January. At that time, investors also moved away from Grayscale-converted GBTC. If the pattern continues to repeat, markets could see Grayscale outflows for days or even weeks. Then, sell fatigue could set in and total flows could turn positive if spot ETH ETFs catch up with Wall Street demand.

However, many in the crypto industry see ETFs for Bitcoin and Ethereum as a spur to more U.S. crypto funds to launch soon. Issuers like VanEck have filed for a Solana (SOL) Trust designed similarly to their existing spot ETFs.

Speaking to Bloomberg’s James Seyffart, Mitchnick said BlackRock is not currently seeing demand for crypto ETFs outside of Bitcoin and Ethereum.

BTC and ETH ETFs Day 1 Comparison:

Total ETH inflows ($108M) account for 16% of BTC inflows ($655M), but this increases to 79% if you exclude outflows from ETHE ($484M)/GBTC ($95M) conversions.

ETHE’s outflows are likely larger because it was already trading at NAV on conversion, while GBTC is still… pic.twitter.com/7E4iGKA7Vr

— Juan Leon (@singularity7x) July 24, 2024