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Welcome to another insightful edition of the "What Happened to Bitcoin ETF?" newsletter. In this issue, we dissect the ETF market's dynamics from April 29th to May 3rd, providing a detailed examination of asset movements and shifts in market perception. Here's what you can expect in this week's analysis:

• AUM and ETF Price Dynamics: Analyzing AUM changes in both U.S. and Hong Kong ETFs.

• BTC Holdings Weekly Flow: Reviewing weekly BTC holding fluctuations of U.S. and Hong Kong ETFs.

• Trends in GBTC Outflow: Examining GBTC outflows and their impact on the Bitcoin market.

• Looking Ahead: What to expect in the coming week.

Join us as we dive deep into the data and extract critical insights from the past week!

1/ Total AUM and ETF Price Dynamics:

Weekly AUM Overview:

The total Assets Under Management (AUM) for the 11 ETFs experienced noticeable changes between April 29th and May 3rd. On April 29th, the total AUM was approximately $52.23 billion. By May 3rd, this value had declined to around $50.68 billion. This represents a reduction of about $1.55 billion in total AUM over the week.

🇭🇰 Hong Kong ETF AUM Overview:

Three days after their launch on April 30th, Hong Kong's spot Bitcoin ETFs recorded a notable $243.69 million in Assets Under Management (AUM). Alongside, Hong Kong's spot Ethereum ETFs achieved a significant $48.57 million in AUM. This combined AUM marks a promising start, reflecting a stronger-than-expected investor interest and the potential for further growth in these Bitcoin and Ethereum ETFs.

2/ BTC Holdings Weekly Flow:

Ending Holdings on May 3rd (Weekly Change):

• GBTC (Grayscale): 291,239 BTC (-7,207 BTC)

• IBIT (BlackRock): 274,062 BTC (-400 BTC)

• FBTC (Fidelity): 149,580 BTC (-4,023 BTC)

• ARKB (Ark 21Shares): 42,227 BTC (-1,454 BTC)

• BITB (Bitwise): 33,460 BTC (-428 BTC)

• HODL (VanEck): 9,163 BTC (-113 BTC)

• BRRR (Valkyrie): 8,106 BTC (+491 BTC)

• BTCO (Invesco Galaxy): 6,516 BTC (+461 BTC)

• EZBC (Franklin Templeton): 5,974 BTC (+841 BTC)

• BTCW (WisdomTree): 1,121 BTC (-106 BTC)

• DEFI (Hashdex): 178 BTC (0 BTC)

Total: 821,625 BTC (-11,938 BTC)

🇭🇰 Hong Kong ETF Holdings:

• ChinaAMC (9042): 2,037 BTC

• Harvest Global (9439): 1,108 BTC

• Bosera Hashkey (9008): 1,019 BTC

Total: 4,164 BTC

Here's a table summarizing the BTC inflow data for each ETF:

On April 30th, ChinaAMC led with an inflow of 1,950 BTC, followed by Harvest Global's 995 BTC and Bosera Hashkey's 964 BTC. Inflows decreased over the next days: on May 2nd, ChinaAMC recorded 55 BTC, Harvest Global 92 BTC, and Bosera Hashkey 35 BTC. By May 3rd, inflows further tapered to 33 BTC, 21 BTC, and 20 BTC for the respective ETFs.

3/ GBTC(Greyscale)'s Outflow Trend:

The outflow of Grayscale Bitcoin Trust (GBTC) continued last week, extending the trend from the previous week. The total weekly outflow reached 7,207 BTC, an increase from the previous week's 6,525 BTC. This upward trajectory in outflows reflects sustained selling pressure, potentially influenced by market volatility and shifts in investor sentiment.

As more investors divest their GBTC holdings, it may signal a growing preference for alternative investment vehicles or a cautious approach toward Bitcoin amid broader macroeconomic uncertainties.

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

4/ Looking Ahead:

Bitcoin's price recently rebounded to $64,087 following a disappointing non-farm payroll report for April. This result has tempered expectations for a Federal Reserve rate cut in the upcoming June FOMC meeting, reducing the likelihood of an aggressive monetary tightening approach. This development has instilled confidence in Bitcoin, with a renewed surge in demand.

Meanwhile, spot Bitcoin ETFs experienced record net outflows totaling $563.7 million last Wednesday amid significant Bitcoin price volatility following the fourth halving event. Despite the outflows, which represent only about 1% of total inflows since January, analysts advise keeping this in perspective and not overreacting to the shift. Blackrock’s iShares Bitcoin Trust (IBIT) and Fidelity’s Wise Origin Bitcoin Fund (FBTC) were among the ETFs that saw notable outflows.

While these outflows coincided with Bitcoin's price decline from $64,500 to below $59,000 last week, Blackrock's Head of Digital Assets, Robert Mitchnick, remains optimistic, noting continued interest from significant investors like pension funds and sovereign wealth funds. Bloomberg's Senior ETF Analyst Eric Balchunas also advises caution, highlighting that the outflows are consistent with normal market behavior during selloffs and represent a small fraction of AUM.

In this environment, the combination of the halving event and the impact of macroeconomic data will continue to shape investor sentiment. The renewed price rebound could signal a bullish momentum for Bitcoin, particularly if macroeconomic factors remain supportive and spot ETF demand stabilizes.

What’s Hot This Week?

1/ Is China 🇨🇳 Warming Up to Bitcoin ETFs?

Key Highlights:

• Hong Kong Spot Bitcoin ETFs: New trading opportunities opened for Asian traders.

• Access for Mainland China: Rumors suggest potential access for Chinese investors via Stock Connect.

• Mitigating Wealth Risks: Bitcoin could offer a real estate alternative for Chinese investors.

The launch of spot Bitcoin ETFs in Hong Kong on April 30th has sparked curiosity about whether mainland China will eventually open its doors to these investment products. Although initial trading was relatively modest compared to the U.S., Hong Kong's strategic proximity to China has prompted speculation on whether mainland investors could access these ETFs.

Richard Byworth, managing partner at SyzCapital and a prominent BTC investor, stirred up the conversation with his comments suggesting that Bitcoin ETFs listed in Hong Kong might soon be accessible through Stock Connect. This cross-border investment route allows qualified investors to trade shares between markets in Hong Kong and China, opening new avenues for Bitcoin enthusiasts.

Brian HoonJong Paik, co-founder and COO at SmashFi, further highlighted the significance of this potential accessibility, citing that 70% of Chinese wealth is tied up in real estate and noting, "There are now 100 million empty homes. The CCP needs an alternative asset to mitigate social unrest." Trade agreements like the Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect could enable Chinese investors to dive into these Hong Kong-listed Bitcoin ETFs.

Despite China's firm anti-crypto stance, these developments hint at the possibility of mainland China slowly warming up to Bitcoin through such investment vehicles. The Qualified Domestic Institutional Investor program and mutual fund recognition between Hong Kong and mainland China could serve as bridges for qualified investors to explore Bitcoin ETFs beyond the regulatory constraints within their own borders.

2/ Is Market Confidence Back?

Key Highlights:

• Bitcoin's Post-Halving Surge: Bitcoin soared to $63,000 on May 4th, igniting momentum for altcoins and boosting the crypto market cap by 5.11%.

• Bitcoin ETF Confidence: Renewed interest in Bitcoin ETFs drove $370 million in inflows, restoring market confidence.

• Hong Kong ETF Impact: Hong Kong's adoption of Bitcoin and Ethereum ETFs accumulated over 4,100 BTC in just three days, reinforcing positive sentiment.

• Shift in Investment Strategy: Institutional investors and wealthy individuals accumulated cryptos during market dips, contributing to the recovery.

Bitcoin’s rise to $63,000 on May 4th signifies renewed optimism in the crypto market. The surge, following the post-halving doubts, ignited strong upward movement in major altcoins like ETH and SOL, leading to a total market cap increase of 5.11%. This rally was fueled by renewed confidence in Bitcoin ETFs, which saw $370 million of inflows despite a previous dip to $34.4 million. Additionally, Hong Kong’s rapid accumulation of 4,128 BTC in just three days through its recently launched Bitcoin and Ethereum ETFs provided further positive momentum.

The shift in investment strategies among institutional investors and wealthy individuals, who strategically accumulated cryptos during downturns, reflects their growing confidence in crypto as a long-term investment. These combined factors reinvigorated the market, dispelling doubts over a post-halving rally and hinting at sustained growth ahead. The market appears poised for further gains as investors anticipate Bitcoin establishing new all-time highs in the coming months.

🐦 Hot Tweet of the Week

1/ Don’t Listen to the SEC Warning

2/ A Great Milestone - 1 Billion Transactions

3/ Aren’t We Still Early?

🍫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. Bitcoin reaches one billion transactions 

   Bitcoin has reached another milestone, processing its one billionth transaction at block 842241, data shows.

2. Bitcoin Flashing ‘Chad’ Setup and en Route to Witnessing Best-Case Scenario, Says Top Crypto Analyst

   A crypto analyst who caught the 2022 Bitcoin bottom thinks BTC is close to witnessing a best-case scenario following mostly bearish price...

3. Grayscale Bitcoin Trust ETF Breaks 11-Week Outflow Streak with $63M Inflows

   After 11 consecutive weeks of outflows, the Grayscale Bitcoin Trust ETF (GBTC) has finally experienced a positive gain of $63 million.

4. Bitcoin Runes reclaims dominance over BTC transactions

   Bitcoin Runes takes the lead in daily transactions on the Bitcoin network, surpassing BTC, Ordinals, and BRC-20.

5. Is China warming up to Bitcoin ETFs? BTC investor's reply sparks curiosity

   The trade agreements between China and Hong Kong could allow mainland investors to access BTC ETFs in Hong Kong.

We celebrate Parents' Day in Korea by giving carnation flowers to our parents. Don't forget to show your gratitude to your parents!

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.