Cryptocurrency ETF Inflows Slow after Month of Record Highs

Bitcoin and Ethereum spot exchange-traded funds (ETFs) experienced a lull on Dec. 18 as crypto markets digested the Federal Reserve’s latest policy moves, with just two interest rate cuts projected for 2025.

Bitcoin fell 4% in the past 24 hours, while Ether slipped 8%.

Bitcoin (BTC) spot ETFs recorded inflows of $275.39 million, marking their lowest daily inflow since Dec. 11, according to SoSo Value data. This figure represents a 44% decrease compared to the $494 million in inflows recorded on Tuesday. Ethereum (ETH) spot ETFs attracted just $2.45 million on Dec. 18, the smallest daily inflow since November 21 and a 98% decline from the $145 million in inflows received on Tuesday.

Experts suggest that the recent dip in cryptocurrency ETF inflows reflects a broader withdrawal in the market, with investors reassessing their strategies amid ongoing volatility and regulatory shifts.

"I wouldn’t say ETF inflows have cooled off; rather, we’re seeing a general pullback across the broader market,” said Azeem Khan, co-founder and COO of Morph. “When you consider the inflows over the past few weeks, these newly introduced ETFs are still among the most successful in 2024 of any ETF.”

Khan explained that for most investors, cryptocurrency remains an emerging market, which often leads to greater uncertainty and more pronounced pullbacks compared to traditional stocks.

Spot ETF Inflows and Outflows

On Dec. 18, Grayscale’s GBTC recorded the largest outflows, losing approximately $36 million. Invesco’s BTCO and Bitwise’s BITB followed with outflows of $25 million and $16.5 million, respectively. Meanwhile, ARK and 21Shares’ ARKB fund saw outflows of $6.58 million. Notably, BlackRock’s IBIT was the only ETF to record inflows, attracting around $360 million.

ETH spot ETFs also experienced outflows, with Grayscale’s ETHE recording outflows of $49.2 million. The Grayscale Ethereum Mini Trust (ETH) recorded outflows of $15.64 million. Bitwise’s ETHW also faced outflows totaling $14.62 million. In contrast, BlackRock’s ETHA fund stood out as the only Ethereum spot ETF to attract inflows, bringing in $81.9 million.

Record Highs

Tuesday's slight pullback follows a month of record inflows into BTC and ETH spot ETFs. BTC spot ETFs have attracted inflows for 15 consecutive days, totaling over $6.7 billion. Meanwhile, ETH spot ETFs have accumulated more than $2.4 billion in inflows over 18 days.

“Looking at Ethereum ETFs, which faced initial headwinds from Grayscale outflows, we're seeing growing momentum with some impressive nine-figure inflow days, including a $428 million net inflow on Dec. 5,” Khan said. “This suggests the market is far from saturation – we're just seeing the natural ebb and flow of a maturing investment vehicle.”