Bitcoin ETFs saw an uptick in U.S. activity on Thursday. After a long period of negative flows, net inflows totaled $39.02million. ARKB was the largest contributor to this inflow, with Ark and 21Shares leading. Ethereum ETFs saw net outflows on the second day in a row, Grayscale ETHE’s loss of $20.14m being the largest. 21Shares has added Anchorage Digital Bank as a custodian for its ETFs. BitGo is also a new partner. Grayscale recently launched the XRP Trust, and Grayscale plans to transition its XRP Trust into an ETF.
Bitcoin ETFs Attract Millions
The spot bitcoin ETFs in the U.S. experienced a welcome turnaround Thursday. ETFs saw net inflows totaling $39.02m after experiencing outflows on the day before and for several days back.
SoSoValue’s data shows that Ark and 21Shares ARKB were the top performers, attracting $18.34 millions in new inflows. Fidelity’s FBTC had a good day as well, with an inflow of $11.47 millions. Grayscale’s Bitcoin Mini Trust was next, receiving $5.18million. VanEck’s HODL Fund and Franklin Templeton’s Bitcoin fund saw smaller inflows, of $4.95 and $3.38 millions respectively. Bitwise’s BITB increased its asset value by $2.22 millions.
Bitcoin ETF flows ( Farside Investors )
Grayscale’s flagship GBTC ETF was the sole bitcoin ETF that lost money, with a loss of $6.51m. BlackRock IBIT was the only bitcoin ETF with no flows Thursday. It is the largest spot Bitcoin ETF based on net assets. Since Aug. 27, it hasn’t seen any net inflows.
In comparison to the $1.27 billion traded on Wednesday, the 12 Bitcoin ETFs had a daily volume that was $896.92 millions. These ETFs are now worth $17.03 Billion in total net inflows.
The spot Ethereum ETFs that are based in the U.S. continue to see net outflows, and Thursday was their second day with losses. Grayscale ETHE was responsible for all of the $20.14m in outflows. The remaining eight ETFs did not see any movement.
The total volume of trading for Ethereum ETFs on Thursday was $106.14 Million, a drop from $126.22 Million the day before. Net outflows cumulatively from Ethereum ETFs total $582.9 millions.
Ethereum ETF Flow (Farside Investors )
BTC’s value in the wider cryptocurrency market is now close to $58,032.69, after it dropped to $53,000 last Friday due to weak data on non-farm payrolls. After the election debate between Donald Trump and Kamalah Harris, and after the publication of consumer prices data, the crypto king recovered to its current value.
The focus of investors is now on the Federal Open Market Committee’s (FOMC) next week. CME Group’s FedWatch Tool shows a probability of 57% for a rate reduction of 25 basis points and 43% for a 50-basis-point cut.
Bull Rally Ether Sentiment needs a small boost
Burak Kesmeci, a CryptoQuant contributor, says that ETH trader sentiment is only slightly elevated to cause a price surge. Kesmeci stated in a Sept. 12 note that a rising funding rate of ETH above 0.015 would signal the start of a bull run.
ETH funding rates are currently around 0.0056%. It is similar to the level it was at in September 2023, before its price surged.
Burak Kesmeci’s Note ( CryptoQuant )
Funding rate is a market fee which helps align futures prices with the spot price and stabilise perpetual contracts. Higher funding rates indicate greater optimism in the market, as traders will be more inclined to take long positions. Kesmeci believes that the support of the futures markets is crucial for ETH to continue its parabolic growth.
The increase in Ethereum’s financing rate from September 2023 led to a 166% rise in price over the following six months. This pushed ETH to $4,006 on March 13, 2023. ETH, however, has been unable to reach $2,500 in the last six months. This is a critical level for traders.
The launch of Ether spot ETFs was expected to boost its price, but critics have noted that it has not.
Futures traders remain skeptical that ETH will be able to breach this critical level in the short term. According to CoinGlass, if it happens, 576.28 millions in short positions may be liquidated.
21Shares adds new custodians to its crypto ETFs
Other ETF news: Asset manager 21Shares has announced that Anchorage Digital Bank, BitGo and other custodians will be added to its spot crypto ETFs. These two will join Coinbase as the custodians of 21Shares U.S.-based spot crypto ETFs.
The ARK 21Shares Bitcoin (ARKB), and the 21Shares Core Ethereum (CETH) ETFs are two of these ETFs. Andres Valencia, the head of 21Shares’ investment management, emphasized that diversifying custodians is essential to ensuring product safety and security.
21Shares is now one of the very first U.S. ETFs that has moved beyond Coinbase, the only custodian. Nate Geraci of The ETF Store commented that issuers will now be more likely to diversify their custodians in order to lower the risk of single points of failure.
There is a growing number of digital asset custody providers in the U.S. Fireblocks was approved by New York’s financial regulator in August to provide asset custody services. Licensed in a similar manner are other institutional players such as Coinbase Custody Trust and Fidelity Digital Asset Services. PayPal Digital is also licensed. They adhere to very strict security standards, and use cold storage wallets, multiparty computation, or MPC, for transactions. Depositors are insured against risk.
U.S. Securities and Exchange Commission has enforced the custody rule in order to protect investor funds. The SEC charged Galois Capital Management in September for not properly safeguarding client funds, which included holding them with now defunct FTX.
Grayscale Launches XRP Trust and Eyes ETF transition
Grayscale Investments has launched the Grayscale XRP Trust to provide investors with exposure to XRP. The trust, announced on September 12, is open to daily subscriptions from accredited individual investors and institutions.
The XRP Trust, like Grayscale’s single-asset investments trusts, is invested solely in XRP (the native token of XRP Ledger, XRPL).
This trust’s launch could pave the way for an XRP exchange-traded fund (ETF). Trusts are less regulated and targeted at accredited investors. While ETFs are subject to SEC approval and are sold to retail investors.
Grayscale outlined a lifecycle of four phases for XRP Trust. This could lead to an ETF that would offer increased transparency and investor access as this product develops.
Grayscale’s Rayhaneh Sharif–Askary is the head of research and product at Grayscale. She stated that XRP had a real-world application, especially in facilitating payments across borders, which can be completed within seconds. The XRP Ledger, a public decentralized blockchain, supports different use cases, such as tokenization, Decentralized Finance (DeFi), or cross-border payment.
Grayscale’s Grayscale Bitcoin Trust (GBTC) is its main product. It holds 222,000 BTC worth over $12.8 billion. Grayscale has sold Bitcoin in large quantities through GBTC. It has also introduced two Ether spot ETFs that have experienced multi-billion dollar outflows.
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