Ethereum funds face continued outflows amid L1 profitability concerns following Decun.
Key Takeaways
- Digital asset investment products saw $436m inflows after a period of $1.2bn outflows.
- Bitcoin received $436m inflows, while Ethereum faced $19m outflows amid L1 profitability concerns.
Bitcoin (BTC) funds registered $436 million in inflows last week, while Ethereum (ETH) funds bled $19 million in the same period, as reported by asset management firm CoinShares. Overall, crypto funds registered $436 million in inflows last week, recovering from $1.2 billion in outflows.
Additionally, funds with short Bitcoin positions registered $8.5 million in fleeing capital after three consecutive weeks of inflows. Notably, the positive flows to BTC-related products ended a 10-day run of outflows totaling nearly $1.2 billion, as highlighted by the report.
Ethereum hurt by concerns over profitability
On the other hand, Ethereum-related products’ shortcomings could be tied to the concerns over the mainnet profitability following the Dencun upgrade on Mar. 13 this year, which significantly reduced the transaction costs of layer-2 blockchains based on Ethereum.
As a result, the fees paid by L2 to store data on Ethereum fell up to 99.6% in 2024, as growthepie’s data reveals. Additionally, data from Token Terminal shows that Ethereum’s weekly revenue is at its lowest year-to-date level since Aug. 12, averaging $4.56 million.
Despite Ethereum’s struggle, Solana registered inflows for the fourth consecutive week, totaling $3.8 million. Multiasset-based funds also saw $22.8 million in inflows.
The report pointed out that the appetite for crypto-related investment products picked up the pace by last week’s end.
This can be attributed to a shift in market expectations for a potential 50 basis point interest rate cut on Sept. 18, following comments from former New York Fed President Bill Dudley.
US leads inflows
Regionally, the US led with inflows of $416 million, followed by Switzerland’s $27 million flows. Notably, Switzerland holds the second-largest amount of year-to-date flows, inching closer to $400 million.
Germany also registered positive flows last week, totaling $10.6 million. However, the country’s net flows amount to negative $319 million in 2024 so far.
Canada and Sweden experienced minor outflows of $18 million and $4.6 million.
Blockchain equities saw inflows of $105 million following the seeding and launch of several new ETFs in the US.
Trading volumes in ETFs remained flat at $8 billion for the week, significantly lower than the average $14.2 billion seen this year so far.
