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- Bitcoin And Ethereum ETF Flows - Dec 5th
By the way, as I was writing this, Bitcoin just crossed $100k! Whether you’re a seasoned multi-cycle veteran or new to the space, this is an incredible milestone. Cheers to everyone who’s been part of this journey!
Quick Recap
It’s been 2 weeks since our last check in on the ETH and BTC ETFs which you can revisit below:
In our previous piece, we highlighted what appeared to be an emerging trend in ETH ETF flows, marked by six consecutive days of positive inflows (Nov 6 - Nov 13). However, this was quickly followed by six days of negative outflows (a full streak of red).
While our timing may have been off in the short term, I believe the medium-term trend remains directionally correct. We're now seeing more consistent and encouraging flows. Here's a breakdown of this week’s data:
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Recent Ethereum ETF Flows
As noted earlier, flows were negative from November 14 to November 21 but have now flipped positive once again.
See the data below from Farside:
($) Millions
This has been the ETH ETFs most prolonged positive flows so far. During this 8-day stretch, ETH ETFs have attracted $882.3 million in positive flows. Notably, on November 29th, they outpaced Bitcoin ETFs, bringing in an impressive $332.9 million in a single day.
What We’re Seeing:
In our previous piece, we noted that ETH had been struggling to attract strong, crypto-native demand. Additionally, the ecosystem itself has been in a period of introspection, searching for a new guiding vision. Critics have pointed to the lack of a cohesive goal or unified marketing message as contributing factors. However, its funny how price appreciation can often be the biggest antidote to some of these worries.
ETH has been on an upswing over the past 14 days, gaining 24.1% in value. The TradFi bid also appears to be making a comeback, as evidenced by eight consecutive days of positive ETF performance.
We're starting to see the early signs of a TradFi "catch-up trade," a concept Michael Nadeau articulates particularly well in the excerpt below:
The ETH ETF market is still dislocated, but the gap is closing -- setting up for a massive rotation.
A quick breakdown 👇
1. The ETH ETFs now have over $11b in AUM, about 10.6% of Bitcoin's ETF AUM
2. Net flows surpassed $1b yesterday, 3% of BTC's ETFs
3. As for the largest… x.com/i/web/status/1…
— Michael Nadeau | The DeFi Report (@JustDeauIt)
12:54 AM • Dec 5, 2024
Recent Bitcoin ETF Flows
($) Millions
This marks the longest stretch of positive inflows for ETH ETFs to date. Over this 8-day period, ETH ETFs have attracted an impressive $882.3 million in positive flows. Notably, on November 29th, ETH ETFs outpaced Bitcoin ETFs, bringing in a remarkable $332.9 million in a single day.
BTC ETF Inflows vs Miner Supply Creation
Key Details:
Block Reward: 3.125 BTC
Blocks Mined Daily: ~144 blocks
Bitcoin Price: $100,000
Calculations:
Daily BTC Created:
3.125 BTC / block × 144 blocks / day= 450 BTC / day
Dollar Value Added to Supply:
450 BTC / day × $100,000/ BTC= $45,000,000 / day
At a block reward of 3.125 BTC and a Bitcoin price of $100,000, $45 million is added to the Bitcoin supply daily.
Over the past 10 days, ETF buy pressure has averaged an impressive $294.67 million per day. ETFs alone are consuming roughly 6.5 times the new supply issuance, and that is not even accounting for additional demand from CEX or DEX activity.
Conclusion
Initially, my call on ETH institutional flows seemed off, but looking at the complete data from the past two weeks, I believe it was directionally accurate. We appear to be in a period of sustained bullish flows for both ETH and BTC ETFs. As we approach Q1 2025, I wouldn't be surprised to see TradFi discussions around the ETH "catch-up trade" gaining traction.
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