"What Happened to Bitcoin ETF?" Newsletter: Institutional Interest Skyrockets in the US Market

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Welcome to "What Happened to Bitcoin ETF?”

In this week's edition, we will cover the key highlights from July 22nd to July 26th. 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 July 26th):

  $62,074,786,583 (Last week: $60,543,368,721)

  ₿914,785 (Last week: ₿905,948)

• Total Weekly Net Flow (July 22nd~26th):

  +$1,531,417,861 (Last week: +$2,022,446,864)

  +₿8,837 (Last week: +₿18,527)

• Top Weekly Performer:

  BlackRock (IBIT): +₿11,280

• Worst Weekly Performer:

  Bitwise (BITB): -₿1,308

1/ Total AUM and Bitcoin Price Dynamics:

Weekly AUM Overview:

As of the latest report, the US Bitcoin spot ETF total AUM is nearing 1 million bitcoins, reaching 914,785 BTC in total. In USD terms, the total AUM surpassed $6.2 billion last week, gaining another $0.2 billion in just a week. This continuous growth in the Bitcoin ETF market demonstrates the resurgence of institutional interest in the Bitcoin market.

Bitcoin price surged 21.58% over the past three weeks, following the $55,000 bottom recorded on July 9th. The surge in Bitcoin price is primarily driven by the growing AUM in Bitcoin ETFs, without question. The total Bitcoin held by US Bitcoin ETFs now constitutes 4.68% of the total Bitcoin supply, up from 3.2% when these ETFs first debuted on January 10th, 2024. This steady increase in Bitcoin held by Bitcoin spot ETFs underscores the growing institutional interest in Bitcoin.

Additionally, notable developments such as Jersey City’s mayor announcing the city’s pension fund’s preparation to allocate a small portion to Bitcoin, and Michigan State’s pension fund revealing its investment in Ark’s Bitcoin spot ETF, highlight the increasing importance of Bitcoin ETFs in projecting the Bitcoin price surge in this cycle. There is no doubt that the growth of Bitcoin ETFs is crucial for the future trajectory of Bitcoin prices.

Highlights from Bitcoin 2024 Nashville:

1. Former President Trump’s Speech

Last Saturday, former President Trump made a significant appearance at the Bitcoin 2024 conference in Nashville. He made several bold commitments regarding the future of Bitcoin in the United States, should he be re-elected. Key points from his speech include:

• Strategic Bitcoin Reserves: Trump pledged to treat the 210,000 Bitcoins currently held by the U.S. government, along with any future acquisitions, as strategic reserves to be added to the national treasury.

• Cryptocurrency Capital: He vowed to transform the United States into the “cryptocurrency capital of the world.”

• Regulatory Changes: Promised to immediately remove Gary Gensler from his position as SEC Chairman.

• Advisory Committee: Announced plans to form a cryptocurrency advisory committee.

If Trump wins the presidency, it is expected that Bitcoin legalization in the U.S. will accelerate. Additionally, the U.S. government’s strategy of holding rather than selling Bitcoin as a strategic asset could positively impact Bitcoin fundamentals.

2. Independent Presidential Candidate Robert F. Kennedy Jr. (RFK Jr.)

Independent candidate RFK Jr. also took the stage, promising four executive orders he would sign on his first day if elected:

• Government Bitcoin Holdings: Committing the approximately 200,000 Bitcoins currently held by the U.S. government to the U.S. Treasury.

• Daily Bitcoin Purchases: Mandating the Treasury to purchase 550 Bitcoins daily until the U.S. holds a total of 4 million Bitcoins. This would give the U.S. a Bitcoin reserve comparable to its gold reserves, which make up 19% of the world’s gold.

• Transaction Reporting and Taxes: Eliminating transaction reporting requirements and tax obligations for Bitcoin transactions, treating them like dollar transactions.

• Capital Gains Tax Relief: Allowing Bitcoin to be reported under IRS Section 1031, which provides capital gains tax relief for property exchanges.

These promises, if realized, would significantly elevate Bitcoin’s status as a currency. RFK Jr.‘s proposals demonstrate a deep understanding of Bitcoin, more so than Trump’s. Even if RFK Jr. doesn’t win, pro-Bitcoin politicians like Trump might adopt these policies, bringing us closer to hyper-Bitcoinization.

3. Senator Cynthia Lummis from Wyoming

Senator Cynthia Lummis presented a draft of a legislative bill she plans to introduce. This bill would mandate the U.S. government to hold one million Bitcoins. With the upcoming November elections, if Trump wins, there’s a high possibility that Lummis’s bill will pass through Congress, solidifying the U.S. government’s significant stake in Bitcoin.

These discussions at Bitcoin 2024 Nashville highlight the growing political momentum behind Bitcoin and the potential for substantial policy shifts that could shape the future of cryptocurrency in the United States.

2/ Bitcoin ETF Weekly Flow:

Ending Holdings on July 26 (WoW Change):

• IBIT (BlackRock): 338,470 BTC (+11,280 BTC)

• GBTC (Grayscale): 270,589 BTC (-1,205 BTC)

• FBTC (Fidelity): 181,127 BTC (+438 BTC)

• ARKB (Ark 21Shares): 49,223 BTC (-744 BTC)

• BITB (Bitwise): 39,192 BTC (-1,308 BTC)

• HODL (VanEck): 11,030 BTC (+57 BTC)

• BRRR (Valkyrie): 8,877 BTC (-1 BTC)

• BTCO (Invesco Galaxy): 7,908 BTC (+204 BTC)

• EZBC (Franklin Templeton): 6,844 BTC (+116 BTC)

• BTCW (WisdomTree): 1,347 BTC (+0 BTC)

• DEFI (Hashdex): 178 BTC (+0 BTC)

Total: 914,786 BTC (+8,837 BTC)

On July 22, BlackRock’s IBIT experienced a substantial daily net inflow of $526 million, marking the sixth-largest inflow in history. This significant influx into Bitcoin ETFs reflects an improvement in institutional investor sentiment.

From the beginning of the year, Bitcoin ETF flows have been fluctuating. However, recent weeks have shown a notable increase in inflows, particularly in BlackRock’s IBIT. This trend is indicative of growing confidence among institutional investors, who are once again seeing Bitcoin as a valuable asset.

3/ Looking Ahead:

Institutional Investments Signal Strong Future Growth

The State of Michigan recently unveiled a nearly $6.6 million investment in the ARK 21Shares Bitcoin ETF. New documents show that Michigan’s Pension Fund has bought up some ARKB, which is trading at $68.04 per share, reflecting a 5.3% increase in the last 24 hours. This positions Michigan’s Pension Fund as the third pension to report owning a BTC ETF, signaling a broader trend of institutional adoption.

The continuous growth in Bitcoin ETF assets under management (AUM) and the increasing participation of institutional investors like the State of Michigan are strong indicators of the resurgence of institutional interest in Bitcoin. As more pensions and large-scale investors allocate portions of their portfolios to Bitcoin ETFs, the market is expected to see further inflows and price stability. This trend suggests that Bitcoin’s role as a strategic asset will solidify, driving both price appreciation and wider adoption in the financial industry. The future of Bitcoin ETFs looks promising as institutional confidence builds, paving the way for sustained growth and integration into mainstream investment strategies.

4/ 🔥What’s Trending Now?:

Ethereum ETFs Undervalued Compared to Ethereum Spot

As of July 26, the state of Ethereum Spot ETFs presents a contrasting picture compared to Bitcoin Spot ETFs. Here are the key statistics for Ethereum Spot ETFs:

• Total Assets Under Management (AUM): $9 billion

• Total Trading Volume: $3.1 billion

• Net Inflows: $177 million net outflow

When comparing Ethereum Spot ETFs to Bitcoin Spot ETFs, the differences are stark:

• Total AUM: Ethereum ETFs hold only 15% of the total AUM of Bitcoin ETFs.

• Total Trading Volume: Ethereum ETFs account for just 23% of the total trading volume of Bitcoin ETFs.

• Net Inflows (First 3 Trading Days): N/A for Ethereum ETFs, whereas Bitcoin ETFs saw a significant net inflow of $893 million.

Despite the initial enthusiasm, investors should be cautious. The debut of Ethereum ETFs might not lead to an increase in Ethereum’s price as Bitcoin ETFs did for Bitcoin. The current data highlights a significant undervaluation and underperformance, suggesting that the market may not respond to Ethereum ETFs as positively as it did with Bitcoin. Therefore, it’s crucial to manage expectations and carefully consider the potential risks before making investment decisions in Ethereum ETFs.

5/ This Week’s Bitcoin Mindset:

Surprise! Trump Turns Out to Be a Bitcoin HODLer

No, We’re Not Going Back to a Cash-Only Society. We Have Bitcoin Now!

🍫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. Kamala Harris campaign seeks ‘reset’ with crypto companies

   Kamala Harris's advisers have approached top crypto companies to “reset” relations between her Democratic party and a sector that has come...

2. Bitcoin price hits six-week high after Trump backs cryptocurrency

   Bitcoin has hit its highest level in more than six weeks after Donald Trump said at the weekend he would end the “persecution” of the crypto...

3. The Clock Has Ticked on Bitcoin's Post Halving Surge, 100 Days After the Latest Quadrennial Halving

   July 29 marks the 100th day since the Bitcoin blockchain cut per block mining rewards to 3.125 BTC from 6.25 BTC.

4. Record $39.4B Bitcoin open interest suggests imminent price breakout

   Open interest is often used to gauge the interest and liquidity behind an asset. In Bitcoin's case, the surge in open interest could signal...

5. Satoshi-Era Bitcoin Address Reactivated After 12 Years

   A Satoshi-era Bitcoin address has been activated after more than 12 years, according to data provided by Whale Alert. Advertisement.

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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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.