Welcome to this week's edition of the "What Happened to Bitcoin ETF?" newsletter. This week, we provide an in-depth analysis of the ETF market's developments from April 8th to April 19th, offering insights into asset management and market sentiment shifts. Here are some key insights we'll cover:

• AUM Dynamics: Track the total AUM movements and ETF price changes to understand the liquidity and market capacity trends.

• BTC Holdings Flow: Examine the changes in BTC holdings across ETFs, highlighting the net inflows and outflows during the period.

• Market Impact: Discuss how economic indicators and geopolitical events are influencing ETF prices and investor behavior.

• Grayscale GBTC Trends: Delve into Grayscale's GBTC outflow trends and potential market implications for future inflows.

Let’s dive into the numbers and explore the strategic insights gathered over the last week!

1/ Total AUM and ETF Price Dynamics:

Weekly AUM Overview:

There has been a significant change in the total Assets Under Management (AUM) for all 11 ETFs between the last trading day of the previous week on April 12th and the last trading day of last week on April 19th. The total AUM on April 12th was approximately $56.27 billion and on April 19th, it decreased to approximately $53.38 billion. This indicates a reduction of approximately $2.89 billion in the total AUM across all ETFs. This decrease highlights a contraction in market liquidity and investor confidence within the ETF landscape over the past week.

Daily ETF Price Observations:

For the top five ETFs by AUM, the following changes were noted in their respective ETF prices per share from April 8th to April 19th:

• GBTC (Grayscale): The ETF price per share decreased from $63.86 to $57.28, showing a decline of roughly 10.3%.

• IBIT (BlackRock): This ETF saw its price per share reduce from $40.90 to $36.59, a decrease of about 10.5%.

• FBTC (Fidelity): Experienced a decrease in price from $62.76 to $56.18, mirroring a similar 10.5% drop.

• HODL: This ETF's price per share declined from $81.25 to $72.70, a drop of 10.5%.

• ARKB: Noted a decrease in its price per share from $71.79 to $64.23, also marking a 10.5% reduction, which aligns with the overall negative performance trend observed in other major ETFs.

2/ BTC Holdings Weekly Flow:

Ending Holdings on April 19th (Change from Previous Week):

• GBTC (Grayscale): 304,970 BTC (-17,727 BTC)

• BITB (Bitwise): 33,659 BTC (+720 BTC)

• IBIT (BlackRock): 273,607 BTC (+9,373 BTC)

• HODL (VanEck): 9,220 BTC (+170 BTC)

• EZBC (Franklin Templeton): 4,959 BTC (+58 BTC)

• BTCO (Invesco Galaxy): 6,018 BTC (+61 BTC)

• BRRR (Valkyrie): 7,926 BTC (+145 BTC)

• FBTC (Fidelity): 153,318 BTC (+2,667 BTC)

• DEFI (Hashdex): 178 BTC (+15 BTC)

• ARKB (Ark 21Shares): 43,177 BTC (-465 BTC)

• BTCW (WisdomTree)

  : 1,226 BTC (+32 BTC)

Comparative Insight on Total Net Flows:

Total BTC Holdings Net Flow

• From April 8th to April 12th: -1,741 BTC

• From April 15th to April 19th: -5,165 BTC

During the week of April 8th to April 12th, the ETFs experienced a net outflow of 1,741 BTC. This figure itself marked a shift from potentially previous positive inflows, indicating a cooling off or a strategic rebalance by some investors amid varying market conditions.

Moving to the following week, April 15th to April 19th, the net outflow substantially increased, with a total of 5,165 BTC leaving the ETFs. This more pronounced decrease more than triples the outflow of the previous week and signals a stronger bearish sentiment or a collective strategic shift among investors towards greater liquidity or alternative investments.

3/ GBTC(Greyscale)'s Outflow Trend:

During the analysis period from April 8th to April 19th, the GBTC (Grayscale) exhibited a noticeable trend in its BTC holdings that reflects a gradual but consistent decrease in its Bitcoin exposure.

Starting with 322,697 BTC on April 8th, the holdings decreased incrementally nearly every day to reach 304,970 BTC by April 19th. This trend represents a total reduction of 17,727 BTC over the 10-day period. The consistent decrease suggests a sustained selling pressure or redistribution of assets to other ETFs.

Such a pattern might indicate a bearish sentiment prevailing among investors, possibly reacting to broader market conditions or shifts in investor strategy towards greater cash liquidity or diversification amidst market uncertainties.

The outflows from Grayscale's GBTC are slowing down, decreasing to $45.8 million on April 12th from $90 million the previous day. This brings the total outflows from the Grayscale BTC ETF to $16.70 billion. Grayscale CEO Michael Sonnenshein suggested that outflows in the GBTC ETF have peaked and anticipates positive inflows soon, although the market is still awaiting these changes.

4/ Looking Ahead:

Analysis of Price Dynamics

Last week's trading reflected a volatile environment for Bitcoin and other cryptocurrencies, largely influenced by significant withdrawals from US spot Bitcoin ETFs. After a considerable $85 million outflow, there was a marked 13% decline in Bitcoin's price over the weekend, contrasting sharply with the previous week's $484 million inflow. This fluctuation underscores the direct impact that ETF liquidity and investor sentiment have on market prices. The reactionary drop in Ethereum and other digital currencies, coupled with a surge in traditional safe havens like gold, further exemplifies the interconnected nature of modern financial ecosystems.

Economic Indicators and Their Impacts

The approval of multiple Bitcoin and Ether ETFs by Hong Kong's securities regulator introduces a new dynamic into the market, potentially stabilizing ETF flows and cushioning the crypto market against further declines. This regulatory move could attract significant investment from Mainland China, offering a fresh influx of capital amidst local economic pressures such as the property slowdown and yuan devaluation. However, the actual impact may be tempered by the relatively small size of Hong Kong’s market, suggesting that while positive, the effect of these new ETFs might be more subdued than some expect, potentially drawing in around $500 million rather than the billions some analysts predict.

Long-Term Outlook and Strategic Decisions:

Looking forward, the landscape for Bitcoin and its correlated ETFs appears cautiously optimistic. Analysts predict that the ongoing demand for US Spot ETFs and the anticipated moderation in geopolitical risks could support Bitcoin's price above the $70,000 threshold. Moreover, the upcoming Bitcoin halving is expected to reduce supply pressure and could further enhance price stability and growth potential in the long term. Such factors highlight the critical role of strategic market entries and the timing of investment decisions in leveraging ETF flows and halving cycles to maximize returns in a still unpredictable market.

On April 19, Bitcoin underwent its fourth halving event. During this event, the rewards given to Bitcoin miners were reduced by half, which effectively doubled the scarcity of Bitcoin. The halving is a pre-programmed occurrence that happens every four years and is built into the Bitcoin blockchain's code. Post the halving, the price of Bitcoin has significantly surged and is currently trading above the $66,000 mark.

The transparent supply schedule and growing scarcity of Bitcoin may lead to a further increase in its price. As more institutions find out the value of Bitcoin as a risk-hedge instrument and begin trading Bitcoin ETFs, the overall US stock market may remain sluggish. On Friday, the S&P 500 and Nasdaq Composite marked their sixth consecutive negative day, their longest losing streak since October 2022.

• Note: All data sources are from the Bitcoin ETF Fund Flows.

What’s Hot This Week?

1/ Bitcoin Halving and Runes Protocol Stir the Crypto Pot

This week in cryptocurrency brought us the much-awaited Bitcoin halving on April 20, a critical event that traditionally propels Bitcoin’s value upwards. Yet, this time, Bitcoin shared the limelight with the controversial debut of the Runes protocol, which caused significant network congestion and escalated transaction fees dramatically.

Key Developments:

• Bitcoin Halving Event: As anticipated, the halving slashed the reward for mining new blocks, aiming to reduce the supply of new Bitcoins entering the market and potentially increase the cryptocurrency’s price.

• Runes Protocol Causes Stir: Coinciding with the halving, the Runes protocol launched and quickly became a topic of hot debate. By using a unique "etching" process to create meme coins directly on the Bitcoin blockchain, Runes significantly increased network activity. This led to unprecedented congestion and a spike in transaction fees – the cost reaching an average of $76 per transaction.

  

  Bitcoin Transaction Fees / Source: Blockchain.com

• Impact on Miners: The surge in transaction fees, while burdensome for users, proved lucrative for Bitcoin miners. Post-halving, miners saw their revenue from fees hit a record high, with one analyst noting that transaction fees in the immediate blocks following the halving exceeded the block rewards—a first in Bitcoin’s history.

This week’s developments have sparked a new wave of discussions about Bitcoin’s scalability, the role of meme coins in the blockchain ecosystem, and the future of mining profitability. Stay tuned as we continue to monitor these exciting trends!

2/ Victory Securities Unveils Fee Structure for Upcoming Bitcoin and Ether ETFs

In another significant development for cryptocurrency enthusiasts, especially those in Hong Kong, Victory Securities has preemptively revealed its fee structure for the newly approved Bitcoin and Ethereum ETFs. This announcement is particularly noteworthy as it precedes the official release of a list of approved issuers by the Hong Kong Securities and Futures Commission (SFC).

Key Developments:

• Early Fee Disclosure: Despite the Hong Kong SFC not yet publishing an approved list of issuers, Victory Securities has been proactive in communicating potential costs to investors. For transactions on the primary market involving Bitcoin and Ethereum ETF shares, fees are proposed to range from 0.5% to 1%, with a minimum fee threshold set at approximately $850.

• Secondary Market Fees: For those trading existing ETF shares in the secondary market, the costs are set at 0.15% for online trades and 0.25% for trades conducted over the telephone.

• Comparison with US Rates: The fee structure outlined by Victory Securities aligns closely with those observed in the United States, where ETF fees vary significantly. Notably, the Grayscale Bitcoin Trust (GBTC) in the U.S. charges a much higher fee of 1.5%.

This proactive fee disclosure by Victory Securities could set a precedent for transparency in the ETF market and might influence how other firms in Hong Kong and beyond choose to communicate their fee structures following regulatory approvals. As the landscape for cryptocurrency ETFs continues to evolve, market participants are keenly watching these developments for insights into future trends.

🐦 Hot Tweet of the Week

1/ The Age of 3.125

2/ Bitcoin is Not For Everyone

3/ Diamond Hands

🍫CRYPTO CRUMBS ON THE TRAIL 🍫

Dive into this week's crunchy bites of crypto news, serving up the freshest updates and insights from the blockchain world.

Here's what's on the menu:

1. Bitcoin Transaction Fees Come Crashing Down Post Halving

2. Bitcoin miners upgrade power centers and get into AI to brace for slashed revenue post halving

3. Bitcoin (BTC) Fees Hit 5-Year Low, Runes Impact Fading

4. Legalization of spot bitcoin ETFs to gain steam

5. Cathie Wood's Ark Buys More Of Its In-House Spot Bitcoin ETF Ahead Of Halving, Pauses Tesla Buying - ARK

Stay tuned to "Crypto Crumbs on the Trail" for your weekly dose of important crypto news, keeping you informed and ahead in the ever-evolving world of digital assets.

Stay charged,

SmashFi Team

P.S. - Follow me on X (@brianhoonjong) and get access to my daily insights on Bitcoin investments! 🚀🐦

“What Happened to Bitcoin ETF?” Newsletter: Dissecting the daily crypto craze with sharp insights and electrifying updates.

Disclaimer: This newsletter is for the brainy and the brave. It's for informational purposes only and not a substitute for investment advice. Always do your own research.