The cryptocurrency investment landscape experienced a stark divergence in early May 2024, as U.S. spot Bitcoin ETFs recorded their fourth consecutive week of outflows totaling $251 million, while Hong Kong’s newly launched crypto ETFs attracted $307 million in their debut week.
TL;DR
- Crypto investment products saw $251M in weekly outflows — the fourth straight week of negative flows
- U.S. spot Bitcoin ETFs accounted for $156M of total outflows, with Fidelity’s FBTC leading at $131M
- Grayscale’s GBTC recorded $277M in outflows, but notably saw its first-ever daily inflow of $63M on May 3
- Hong Kong’s spot Bitcoin and Ethereum ETFs attracted $307M in their first week of trading
- Ethereum broke a 7-week outflow streak with $30M in fresh inflows
U.S. Bitcoin ETF Bleed Accelerates
According to CoinShares’ weekly report published on May 7, the digital asset investment product market experienced significant withdrawals, with the so-called “Newborn Nine” U.S. spot Bitcoin ETFs bearing the brunt of the selling pressure. These funds, which launched to enormous fanfare in January 2024, accounted for over 60% of the total outflows, losing approximately $156 million during the reporting period.
Fidelity’s FBTC suffered the heaviest losses among the new issuers, with $131 million exiting the fund. Ark 21Shares’ ARKB was close behind, shedding $84 million. Even BlackRock’s IBIT, which had been the standout performer among the new ETFs, recorded a modest negative flow of $24 million.
Grayscale’s GBTC continued its established outflow pattern with $277 million withdrawn during the period. However, in a significant development, the fund recorded its first-ever daily net inflow of $63 million on Friday, May 3, since converting from a closed-end trust to a spot ETF in January. Bloomberg data confirmed the milestone, which temporarily halted GBTC’s massive outflow streak.
Automatic Sell Orders Triggered
James Butterfill, CoinShares’ head of research, offered a compelling explanation for the wave of selling. “We estimate the average purchase price of these ETFs since launch to be $62,200 per bitcoin,” he noted. “As the price fell 10% below that level, it may have triggered automatic sell orders.”
With Bitcoin trading around $62,334 on May 7 according to CoinMarketCap data, the price had indeed approached this critical threshold, potentially explaining the accelerated outflows as institutional and retail investors hit stop-loss levels.
Hong Kong ETFs Defy Global Trend
In sharp contrast to the U.S. experience, Hong Kong’s newly launched spot Bitcoin and Ethereum ETFs attracted $307 million in inflows during their first week of trading. The products, which began trading on April 30, saw their peak daily fund flow on May 6, with $23.1 million entering the Bitcoin ETFs alone.
The enthusiasm surrounding the Hong Kong launches was further amplified by rumors that the products could eventually be added to the Stock Connect facility, which would allow qualified mainland Chinese investors to access them. Richard Byworth, managing partner at Syzcapital, fueled speculation with a social media post stating there was “talk” in Hong Kong about this possibility, calling the implications “absolutely enormous.”
Ethereum and Select Altcoins Find Favor
While Bitcoin bore the brunt of institutional selling, Ethereum snapped a seven-week streak of negative flows by recording $30 million in inflows. The shift suggested that some investors were rotating capital from Bitcoin into Ethereum and alternative cryptocurrencies.
Several altcoins also attracted modest institutional interest. Avalanche, Cardano, and Polkadot each recorded inflows of approximately $0.3 to $0.5 million. On the spot market, Solana’s SOL and XRP showed notable relative strength, gaining 4% to 6% even as Bitcoin declined 1.5% on May 6.
Why This Matters
The divergent performance of U.S. and Hong Kong Bitcoin ETFs highlights a geographic shift in crypto investment flows. While U.S. investors appeared to be de-risking amid regulatory uncertainty — a trend compounded by Robinhood’s receipt of a Wells Notice from the SEC on the same day — Asian markets were showing increasing appetite for regulated crypto exposure.
GBTC’s first inflow since conversion could signal that the worst of Grayscale’s outflow pressure may be easing, though it remains too early to call a trend reversal. Meanwhile, the potential inclusion of Hong Kong’s crypto ETFs in the Stock Connect program would represent a watershed moment, potentially unlocking access for millions of mainland Chinese investors.
With Bitcoin hovering around $62,334 and the market searching for direction, the interplay between U.S. regulatory pressure and Asian institutional demand will likely define the next phase of crypto price action.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Cryptocurrency investments carry significant risk. Always conduct your own research before making investment decisions.
GBTC getting its first ever daily inflow of $63M is the headline here. 78 days of bleeding finally stopped
63M daily inflow after 78 days of bleeding. one swallow doesnt make a summer but it proved the outflow trend wasnt infinite
Hong Kong ETFs pulling $307M in week one while US bleeds $251M. capital flows are shifting east
$307M from HK in week one is impressive but context matters. these are mostly asia-based flows that were never going into US products anyway
exactly. the $307M HK inflow was mostly mainland China money finding a regulated onshore vehicle. it was never destined for US ETFs
the HK 307M was china money finding a regulated rail. calling it a shift east misses that it was never headed west in the first place
jurisdiction_alpha_ calling the 307M HK inflow china money on regulated rails is accurate. most of that volume was never going to US ETFs in the first place
Hong K. exactly. 307M HK inflow was mainland capital finally getting a regulated rail. calling it a shift east is just rebranding capital flight
jurisdiction_alpha_ saying the HK 307M was china money finding a rail is correct but incomplete. a chunk of that was singapore family offices and middle east allocators who wanted regulated crypto exposure without US custody risk
ETH breaking its 7 week outflow streak with $30M inflow is being completely overshadowed by the BTC narrative
^ because $30M is a rounding error compared to the ETF flows we were seeing in Q1
ETH breaking 7 weeks of outflows with 30M inflow and nobody cared. btc narrative ate the entire story
Fidelity FBTC losing 131M while GBTC saw its first 63M daily inflow. the rotation within US products was the real story not the HK vs US narrative
FBTC bleeding 131M in one week while GBTC saw its first daily green candle is crazy. fidelity was supposed to be the institutional favorite and they were the weakest link
fbtc_bear Fidelity losing 131M while GBTC flipped positive was the real rotation signal. nobody wanted to talk about FBTC bleeding though
Fidelity FBTC losing $131M is the real surprise. that fund was the poster child of institutional adoption
FBTC outflows were the real signal. if Fidelity cant hold institutional AUM in a BTC ETF something is structurally wrong with the product
us etfs bleeding 251m in one week while hk pulled 307m right out the gate. gbtc finally flipped to 63m inflow feels like rotation.
ETH breaking 7 weeks of outflows with 30M and getting zero coverage. the media only cares about BTC ETF flows even when ETH is the leading indicator
4 straight weeks of US outflows at 251M total while HK pulled 307M in week one. the east vs west ETF narrative was overblown but the flow divergence was real
GBTC seeing its first $63M daily inflow after months of bleeding was barely mentioned. that was the moment the outflow narrative started cracking
4 straight weeks of US outflows at 251M and people still called it a buying opportunity. ETH quietly breaking 7 weeks of outflows was the actual signal
flow_check that 63m gbtc daily inflow is the first sign the tide might be turning for us products.
GBTC seeing its first daily inflow of 63M after months of bleeding and everyone missed it. that was the bottom signal for spot ETF sentiment
307M into Hong Kong ETFs in week one while US bled 251M. the east-west divergence was obvious even then, capital follows friendlier regulation