"What Happened to Bitcoin ETF?" Newsletter: The Battle for Bitcoin ETFs - Advisors vs. Hedge Funds

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Welcome to "What Happened to Bitcoin ETF?”

In this week's edition, we will cover the key highlights from August 12th to August 16th. We provide a concise and engaging analysis of the Bitcoin ETF market and review the overall performance of the Bitcoin market during this period.

Weekly Bitcoin ETF in Numbers

• Total AUM of Bitcoin ETFs (as of August 16th):

  $54,328,674,692 (Last week: $55,166,403,503)

  ₿911,606 (Last week: ₿910,846)

• Total Weekly Net Flow (August 12th~August 16th):

  -$837,728,811 (Last week: -$162,228,119)

  -₿760 (Last week: -₿26,816)

• Top Weekly Performer:

  Fidelity (FBTC): +₿1,391

• Worst Weekly Performer:

  Grayscale (GBTC): -₿3,409

1/ Total AUM and Bitcoin Price Dynamics:

Last week, the Bitcoin ETF market took a rollercoaster ride, with a dramatic $81 million outflow on Wednesday, August 14th, abruptly ending a brief period of gains. After positive inflows of $39 million on Monday and $27.8 million on Tuesday, this sharp reversal highlighted the ongoing turbulence in the Bitcoin market.

Leading the charge in Wednesday’s outflow was Grayscale’s GBTC fund, which saw a staggering $56.9 million pulled out. Fidelity’s FBTC wasn’t far behind, with an outflow of $18 million. Other significant withdrawals included $6.77 million from Ark and 21Shares’ ARKB and $5.78 million from Bitwise’s BITB. Despite this wave of exits, a few funds managed to draw new investments—Franklin Templeton’s EZBC fund attracted $3.4 million, and BlackRock’s IBIT pulled in $2.7 million.

Fast forward to Friday, August 16th, and the market’s tone shifted yet again. According to Farside Investors, Bitcoin ETFs saw a total net inflow of $35.9 million. Key players included BlackRock’s IBIT with $20.4 million, Fidelity’s FBTC with a robust $61.3 million, BITB with $12 million, and ARKB with $13.4 million. However, Grayscale’s GBTC continued its downward trend, with a significant -$72.9 million outflow, while several other ETFs like BTCO, BRRR, HODL, and BTCW saw no net changes.

These mixed flows reflect the market’s ongoing uncertainty and the varying investor sentiment across different Bitcoin ETF products. The turbulence had a noticeable impact on Bitcoin’s price, which currently hovers around $58,600, marking a 0.22% decline over the past week. During this period, Bitcoin’s price swung between a high of $61,537 and a low of $57,812. With the cryptocurrency now 20.7% below its all-time high, it’s clear that the pressure on Bitcoin’s valuation continues to weigh heavily on the market.

Goldman Sachs Dives Deep into Bitcoin: $418 Million in Spot ETF Holdings Unveiled

In a bold move that underscores the growing clout of cryptocurrency in traditional finance, Goldman Sachs has unveiled a staggering $418.65 million in spot Bitcoin ETF holdings. According to a recent SEC filing, the Wall Street giant holds nearly 7 million shares of BlackRock’s iShares Bitcoin Trust (IBIT), making it the fund’s third-largest investor. This isn’t a casual dip into crypto—Goldman is all in.

But BlackRock isn’t the only game in town for Goldman. The bank also holds 1.51 million shares of Fidelity’s FBTC, valued at $79.5 million, and a stake in Grayscale’s Bitcoin fund worth $35.1 million. And that’s just the tip of the iceberg—they’ve got $56.1 million in Invesco Galaxy Bitcoin ETF shares and additional investments in Bitwise, WisdomTree, and Ark-21Shares.

Why does this matter? Goldman’s significant stake signals a powerful endorsement of Bitcoin ETFs from one of the most influential players in global finance. As crypto continues to move from the fringes to the mainstream, this could be just the beginning of a deeper integration of digital assets into traditional portfolios.

Interestingly, Goldman isn’t alone in this game. Capula Management Ltd., one of Europe’s largest hedge funds, reported an even larger $464 million in spot Bitcoin ETF holdings earlier this month. The big players are making their moves—are you ready?

2/ Bitcoin ETF Weekly Flow:

Ending Holdings on August 16 (WoW Change):

• IBIT (BlackRock): 348,951 BTC (+1,184 BTC)

• GBTC (Grayscale): 230,430 BTC (-3,409 BTC)

• FBTC (Fidelity): 178,014 BTC (+1,391 BTC)

• ARKB (Ark 21Shares): 46,634 BTC (+613 BTC)

• BITB (Bitwise): 37,993 BTC (+196 BTC)

• BTC (Grayscale Mini): 31,598 BTC (+629 BTC)

• HODL (VanEck): 10,917 BTC (+0 BTC)

• BRRR (Valkyrie): 8,876 BTC (-1 BTC)

• BTCO (Invesco Galaxy): 8,030 BTC (+71 BTC)

• EZBC (Franklin Templeton): 6,525 BTC (+87 BTC)

• BTCW (WisdomTree): 3,494 BTC (+0 BTC)

• DEFI (Hashdex): 144 BTC (+0 BTC)

Total: 911,606 BTC (+760 BTC)

3/ Looking Ahead:

Shifting Tides: What’s Next for the Bitcoin Spot ETF Market?

In the coming weeks, the Bitcoin spot ETF market is set to navigate some interesting shifts. Investment advisors have been increasing their holdings, signaling growing confidence in Bitcoin ETFs. This trend is expected to continue, especially as more brokerage firms complete their due diligence. However, with many investors likely on vacation, the large inflows from advisors may be delayed, leading to potential market volatility in the short term.

On the other hand, hedge funds are showing less interest in ETFs, instead turning their attention to Bitcoin futures trading. This shift suggests that hedge funds might have a reduced influence on the ETF market for now, which could impact overall market dynamics.

Looking further ahead, as advisors become more comfortable recommending Bitcoin ETFs to their high-net-worth clients, we could see a significant influx of capital into the market, potentially stabilizing it and reducing volatility. Despite recent price drops, the strong underlying demand, evidenced by the $2.4 billion in net inflows during Q2 2024, points to a promising future for Bitcoin ETFs. While short-term fluctuations are likely, the long-term outlook remains positive as more institutional players get involved.

4/ 🔥What’s Trending Now?:

Goldman Sachs Eases Recession Fears, Boosting Market Optimism

Goldman Sachs has just lowered the odds of a U.S. recession to 20%, down from 25%, thanks to strong retail sales and a drop in jobless claims. This optimism is fueling the markets, with U.S. stocks seeing their best week of the year. If the upcoming August jobs report on September 6th shows positive results, Goldman might further cut the recession risk to 15%. The improving economic outlook is also sparking speculation that the Federal Reserve could lower interest rates by 25 basis points at its next meeting, potentially even 50 basis points if the jobs data disappoints. All eyes are on the jobs report as it could shape the Fed’s next move and set the tone for the markets in the coming months.

5/ This Week’s Bitcoin Mindset:

1. When the Debt Ship Sinks, I’m Sailing with Bitcoin 🚤💸 

2. Bitcoin: The Pin to Pop the Dollar Bubble 💥

3. Bitcoin: The New Gold Standard, Leaving Fiat in the Dust 🚀💰

🍫CRYPTO CRUMBS ON THE TRAIL 🍫

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

Here's what's on the menu:

1. Trump's Election Odds Are Not The Dominant Driver of Bitcoin's Price, Data Show

   Many crosscurrents influencing prices, such as U.S. monetary policy expectations and supply overhangs, might be responsible for the weak...

2. Satoshi Nakamoto's Historic Bitcoin Milestone Turns 16: Details By U.Today

   U.Today - Sixteen years ago today, pseudonymous Bitcoin creator Satoshi Nakamoto took a pivotal step in the development of what would become...

3. Morgan Stanley Becomes First Wall Street Giant To Let Advisors Recommend Bitcoin ETFs

   Morgan Stanley recently became the first major Wall Street bank to permit its financial advisors to offer Bitcoin (CRYPTO: BTC) ETFs to...

4. Bitcoin Miners Shifting to Artificial Intelligence and High-Performance Computing, According to VanEck Analysts

   New research from VanEck reveals that Bitcoin (BTC) miners are shifting to artificial intelligence (AI) and high-performance computing.

5. Michael Saylor Stuns With Bitcoin Statement Amid BTC Price Pause By U.Today

   U.Today - Michael Saylor, co-founder and chairman of MicroStrategy, has once again captured the attention of the crypto community.

That’s it for today; stay tuned for more updates and insights in our next edition!

Stay charged,

SmashFi Team

P.S. - Follow me on X (@brianhoonjong) for daily doses of insightful updates on Bitcoin ETFs and beyond! 🚀🐦

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“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.