More demand for BTC than ETH for now

BlackRock's head of digital assets, Robert Mitchnick, said that bitcoin ETFs currently attract more investor demand than ethereum funds.

The bitcoin 2024 conference in Nashville, which is expected to attract 20,000 cryptocurrency enthusiasts, comes at a time when exchange-traded funds now offer exposure to the largest cryptocurrencies: bitcoin (btc) and ethereum (eth).

eth spot ETFs are new entrants to the market, but btc spot ETFs have been trading since January and have accumulated over $60 billion in assets under management, according to SoSoValue. Mitchnick commented that it is still early days and that flows have yet to indicate whether investors will reallocate capital from bitcoin funds to ethereum ETFs.

Spot Ether ETFs accounted for 79% of total first-day flows recorded by spot bitcoin products. Data including Grayscale outflows reduced that figure to 16% as investors dumped the firm’s ETHE vehicle. ethereum responded with a price drop, dropping as much as 7% on July 25.

Similar flows occurred in January when spot btc ETFs launched. At that time, investors also dumped GBTC-turned-Grayscale. If the pattern continues to repeat itself, markets may see days or even weeks of outflows from Grayscale. Sell fatigue could then set in and total flows could turn positive if spot eth ETFs catch Wall Street demand.

However, many within the cryptocurrency industry believe that bitcoin and ethereum ETFs encourage the launch of more US cryptocurrency funds in the near future. Issuers such as VanEck have filed applications for a Solana (SOL) trust designed similarly to existing spot ETFs.

Speaking to Bloomberg's James Seyffart, Mitchnick said BlackRock currently sees no demand for cryptocurrency ETFs beyond bitcoin and ethereum.

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