Bitcoin And Ethereum ETF Flows - Jan 29

A TLDR From The January 9th Post:

• Ethereum (ETH) ETFs have had mixed flows over the last two weeks but showed net inflows of $193.7M.

• Bitcoin (BTC) ETFs also showed mixed flows but accumulated $464.6M in net inflows over the last two weeks, with significant contributions from Blackrock and Fidelity on January 3rd and 6th.

• Macroeconomic Sensitivity: Both BTC and ETH ETFs are becoming more sensitive to macroeconomic changes, with current uncertainties around Federal Reserve policies and inflation.

• Political Uncertainty: President-elect Donald Trump's unpredictable policies and rhetoric are affecting market stability, potentially influencing the investment climate for cryptocurrencies.

• Market Reaction: There was an expectation of a market rally followed by a "sell the news" event post-inauguration, but current dips might be a cooling-off period.

• DOJ Bitcoin Sale: News of the DOJ's clearance to sell $6.9B in BTC on December 30th might have influenced the recent market dip, although the BTC remains in the DOJ wallet, suggesting potential future sell pressure.

Full post here:

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Jan 28th Update

Recent Ethereum ETF Flows

See the data below from Farside:

Looking back over ~2 weeks ETH flows have once again been very mixed and just barely positive with $146.7M net inflows during this time.

What We’re Seeing:

The ETH ETF feels fairly neutral right now. It seems like many are already anticipating the staking ETFs which would allow investors to tap into the natural yield of staked ETH. Even SEC Commissioner Hester Pierce is reviewing both “in-kind” and “staking” ETFs as you can see in the clip below:

Recent Bitcoin ETF Flows

See the data below from Farside:

In contrast to Ethereum, Bitcoin has had incredible flows the past few weeks bringing in $3.13B of net inflows.

What We’re Seeing:

All of the ETF issuers initially wanted to start out with “in-kind” ETFs as it would streamline a lot of their internal processes and be a better product for customers in general. As you can see below, BlackRock has officially filed for their version:

Other Major Market News:

This is our first ETF piece since Trump's inauguration, and there have been numerous tidbits of tangential news affecting ETFs.

The Strategic Bitcoin Reserve:

Many Bitcoin enthusiasts were eager to see if Trump would establish a Strategic Bitcoin Reserve. Whether or not such an initiative made sense, he did follow through to some extent. However, many in the Bitcoin community took umbrage with the fact that Trump seemed to shift the goalposts by proposing a "Strategic Crypto Stockpile" instead. This new proposal lacked the exclusivity of focusing solely on Bitcoin, and the term "Stockpile" suggested a passive holding of existing assets rather than active purchasing.

Ross Ulbricht Freed:

Ross Ulbricht, the creator of the first crypto powered marketplace known as The Silk Road, was granted freedom by President Trump. This act fulfilled another significant promise he made to the Bitcoin community.

World Liberty Fi Keeps Buying:

The DeFi project that is backed by the Trump family known as World Liberty Fi has a public crypto address where anyone can look onchain and see what they’re buying. They haven’t been shy about loading up on crypto over the last few weeks. This is the current state of their holdings:

Rumors Of Potential Zero Crypto Tax Policy:

I don’t know how serious this is, but I’ve definitely seen this story floated that its something the Trump administration is thinking of. Read about it here.

TRUMP Coin:

The launch of the TRUMP memecoin days before the inauguration was a puzzling move to me. It immediately sucked a lot of liquidity out of the entire crypto market as it ascended to a ~$70B FDV. Personally, I wasn’t a fan of it but was starting to move on when all of the sudden the second token hit the orderbooks. Yep, MELANIA coin closely followed the launch of TRUMP. This caused TRUMP to plummet while MELANIA also grew to an astronomical valuation. She even tweeted it from her personal account:

Crypto has had its fair share of dumb moments, but this honestly felt like a top 5 embarrassing moment for our industry or maybe I’m just getting old. I tweeted this shortly after:

Solana ETFs in Canada First?:

Canada has typically lead the way in getting many of these crypto financial products first. It would appear this could happen again with Solana ETFs:

Conclusion

The crypto ETF market presents a stark contrast in performance: Ethereum ETFs have only managed to accrue a modest $146.7 million, suggesting a wait-and-see approach from investors possibly due to the anticipation of staking ETFs. In contrast, Bitcoin ETFs have attracted a substantial $3.13 billion, driven by enthusiasm for the shift towards more efficient "in-kind" structures.

Politically, Trump's administration has influenced the crypto scene by proposing a broader "Strategic Crypto Stockpile" instead of a Bitcoin-specific reserve, causing some community friction. However, freeing Ross Ulbricht was a significant positive gesture towards Bitcoin supporters.

World Liberty Fi's heavy investment in ETH, including staking, suggests confidence in Ethereum's future. Rumors of a zero crypto tax policy hint at potential policy-driven growth.

The launch of TRUMP and MELANIA meme coins has been controversial, pulling liquidity from the market and spotlighting the industry's more speculative side. Meanwhile, Canada might soon lead in Solana ETFs, continuing its trend in crypto innovation. These developments illustrate a market at a pivotal point, balancing regulatory developments, institutional investment, and speculative fervor.

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