Title: Bitcoin ETFs See $19.1 Billion Inflows While Ethereum ETFs Face Net Outflows: Citi Analysts
Investing.com — According to Citigroup strategists, spot ETFs are experiencing net outflows in their second week of trading, resembling the trend that ETFs faced upon their initial launch. Interestingly, Ethereum’s recent price movements have been more influenced by equity market fluctuations rather than ETF flows, unlike Bitcoin.
Citi analysts noted that the recent market correction in risky assets has once again highlighted the limited diversification benefits provided by cryptocurrencies. Despite this, crypto fundamentals remain strong, with stablecoins avoiding significant outflows and hash rate increasing despite weaker price performance.
The analysts also pointed out that Bitcoin has yet to live up to its “digital gold” reputation, as it did not act as a safe haven during the recent market correction. On the other hand, spot Bitcoin ETFs have seen substantial inflows totaling $19.1 billion through August 5, explaining over 40% of the variance in weekly Bitcoin price movements since the ETFs launched in January. In contrast, ETH ETFs have faced $460 million in net outflows in their first two weeks of trading.
The differing investor behaviors and market reactions to Bitcoin and Ethereum are evident in the price action of these two leading cryptocurrencies. While Ethereum ETF flows have been negative initially, Bitcoin ETFs also experienced a decline post-launch between days 4 and 12.
Despite the recent crypto selloff, certain fundamentals have remained resilient. Search interest in cryptocurrencies is on the rise, stablecoins have not experienced significant outflows, and decentralized exchange volumes continue to grow compared to centralized volumes. Additionally, hash rate remains volatile but has seen recent increases.
In summary, the data from Citi analysts suggests that Bitcoin ETFs are attracting substantial inflows while Ethereum ETFs are facing net outflows. The analysis also highlights the different investor behaviors and market reactions to Bitcoin and Ethereum, emphasizing the importance of understanding these dynamics for investment decisions in the crypto market.