In a recent interview with crypto influencer Scott Melker, Bloomberg ETF analysts James Seyffart and Eric Balchunas shed light on the successes and challenges of the burgeoning spot cryptocurrency ETF market. The analysts revealed that Bitcoin ETFs have witnessed impressive inflows since their launch, with assets totaling around $17.5-$18 billion. Seyffart noted that these ETFs currently hold approximately 920,000 Bitcoin, approaching a significant milestone. Balchunas further emphasized the rapid institutional adoption, stating that within a year, US ETFs will hold more Bitcoin than Satoshi, the pseudonymous creator of Bitcoin.
However, Ethereum ETFs have encountered a different trajectory, with Seyffart acknowledging negative flows since their launch. Despite this, Balchunas provided context, emphasizing that Ethereum ETFs would be the top performer this year if Bitcoin ETFs were excluded, with a total inflow of $1 billion. He pointed out that the BlackRock Ethereum ETF ETHA currently ranks 136 overall based on inflows for all ETFs this year, placing it within the top 3%.
The analysts also addressed the withdrawal of Solana ETF applications, suggesting that this is an early step in a longer process. Balchunas compared it to Bitcoin’s ETF journey, stating that these initial filings are like the “first shots” and might require a different political climate or the development of futures markets for approval. He likened it to the Winklevoss filing in 2013, which faced similar hurdles before the market evolved.
Regarding Ethereum ETFs, the analysts urged investors to be patient, acknowledging a slower adoption curve compared to Bitcoin ETFs. Balchunas compared Ethereum to silver and Bitcoin to gold, suggesting that Ethereum ETFs will carve their own market niche. He emphasized the long-term potential, stating that they are off to a decent start.
The conversation also touched upon the broader ETF market, highlighting record inflows across various sectors. Balchunas emphasized that the breadth of flows beyond equities is a promising sign for the industry. A particularly noteworthy development was the launch of highly volatile products like leveraged MicroStrategy ETFs (MSTX). Seyffart described one such product as “the most volatile ETF ever introduced in the United States,” while Balchunas added that it is “the most immediately popular leveraged ETF ever to launch.”
In conclusion, while acknowledging the current challenges, the analysts emphasized the need for patience and a broader perspective. Balchunas summarized, “Don’t worry. They had a lot of things going against them. They’re doing okay despite it.”
The analysts’ insights suggest that the influence of Bitcoin as an institutional asset class will be a key focus at Benzinga’s upcoming Future of Digital Assets event on November 19.
