Post-Christmas Bounce for Bitcoin ETFs: $475 Million in Inflows After Four-Day Outflow Slump

In a post-Christmas turnaround, U.S. Bitcoin exchange-traded funds (ETFs) experienced a positive net inflow on December 26, signaling a rebound after a four-day stretch of heavy outflows that saw more than $1.5 billion exit the funds.

The 11 Bitcoin ETFs collectively reported inflows totaling $475.2 million on December 26, with the Fidelity Wise Origin Bitcoin Fund leading the charge, bringing in $254.4 million. The ARK 21Shares Bitcoin ETF followed closely, attracting $186.9 million in inflows. BlackRock's iShares Bitcoin Trust ETF (IBIT) also saw a strong showing, with $56.5 million in new capital. More modest inflows were recorded by Grayscale’s mini Bitcoin ETF, which took in $7.2 million, and VanEck’s Bitcoin ETF, which saw $2.7 million.

This surge in inflows came after a challenging period for Bitcoin ETFs. U.S. markets were closed on December 25 for Christmas Day, but the preceding four days — from December 19 to December 24 — saw a combined outflow of $1.52 billion. This was a significant drain on assets, and on December 24, IBIT experienced its largest-ever single-day net outflow, losing $188.7 million, more than doubling its previous record of $72.7 million set just four days earlier.

Despite the outflows, the return of inflows to Bitcoin ETFs is a welcome sign, especially amid a broader decline in Bitcoin’s price. At the time of writing, Bitcoin was down 2.2% over the past 24 hours, hovering just above $96,000, down from around $98,000.

Ethereum ETFs See Positive Momentum

In contrast to Bitcoin’s fluctuating performance, Ethereum ETFs also saw a continuation of inflows, marking their third consecutive day of positive net flows. Over this period, Ethereum ETFs accumulated $301.6 million in net inflows, with the majority of the funds coming on December 26. The Fidelity Ethereum ETF led the pack, contributing $83 million in new investments, followed by BlackRock’s iShares Ethereum Trust ETF with $28.2 million. Grayscale’s Ethereum Trust ETF also reported a modest $6 million in inflows.

However, despite the positive inflow trend, Ether (ETH) has underperformed relative to Bitcoin in recent months. As of December 26, Ethereum was down 1.7%, dipping below $3,400, and has failed to set a new all-time high in contrast to Bitcoin’s recent rally.

2023 Year-End Outlook for Crypto ETFs

As the year draws to a close, Bitcoin and Ethereum ETFs are nearing the end of their first full year of trading. Bitcoin ETFs have posted remarkable results, with a total of $35.9 billion in net inflows for 2023 and assets under management (AUM) reaching $111.9 billion. Ethereum ETFs, while smaller in comparison, have still seen impressive growth, bringing in $2.63 billion in net inflows and managing an AUM of approximately $12 billion.

With only three trading days left in 2023 — December 27, 30, and 31 — the outlook for both Bitcoinand Ethereum ETFs remains strong, despite the recent volatility in their underlying assets. Crypto investors and fund managers alike will be closely watching the final days of the year as they reflect on the performance of these innovative investment vehicles.

Conclusion

After a period of significant outflows, U.S. Bitcoin ETFs saw a welcome post-Christmas rebound, with inflows of nearly $475 million. The surge followed a challenging period for crypto ETFs, but it also highlights the resilience of the market as it approaches the end of a remarkable year. Meanwhile, Ethereum ETFs also experienced positive inflows, adding to the growing interest in digital asset funds, though Ethereum itself has faced challenges in outperforming Bitcoin. The final days of 2023 will be crucial in determining how these funds close out the year and set the stage for 2024.