Digital Asset Fund Flows | July 29th 2024

• Digital asset investment products saw a relatively muted US$245m of inflows last week, although this obscures a mixed picture for various digital assets.

• Bitcoin saw further healthy inflows of US$519m, bringing its month-to-date inflows to US$3.6bn.

• The launch of the US spot-based Ethereum ETFs saw some of the largest inflows since December 2020, with newly issued ETFs seeing US$2.2bn inflows, but incumbent outflows offset this with net outflows over all of US$285m.

Digital asset investment products saw a relatively muted US$245m of inflows last week, although this obscures a mixed picture for various digital assets. Trading volumes rose to the highest levels since May at US$14.8bn for the week, helped by the recent Ethereum ETF launches. Recent price appreciation has brought total assets under management (AuM) to US$99.1bn while total inflows year-to-date (YTD) are at a record breaking US$20.5bn.

Bitcoin saw further healthy inflows of US$519m, bringing its month-to-date inflows to US$3.6bn and YTD inflows to a record US$19bn. We believe the US electioneering comments around Bitcoin as a potential strategic reserve asset, and the increased chances for a September 2024 FED rate cut are the likely reason for renewed investor confidence.

The launch of the US spot-based Ethereum ETFs saw some of the largest inflows since December 2020, with newly issued ETFs seeing US$2.2bn inflows, while trading volumes in ETH ETP rose by 542%. This figure is somewhat controversial as Grayscale seeded its new Mini Trust ETF (the week prior) with capital from its incumbent closed-end trust (~US$1bn), which may help explain the steady stream of outflows in recent years. Further, this week saw continued outflows from Grayscale’s incumbent trust of US$1.5bn as some investors cash out, leading to a net outflow of US$285m last week. This is a similar situation to the Bitcoin trust outflows in at the January 2024 ETF launches.