In an interview with crypto influencer Scott Melker, Bloomberg ETF analysts James Seyffart and Eric Balchunas highlighted both the challenges and successes of the new spot cryptocurrency ETFs.
What Happened: On the latest episode of Melker's podcast, Balchunas emphasized the resilience of Bitcoin ETF investors, noting, "99.5% of the assets stuck, even though there was a weekend where they woke up to a 15% downturn."
Regarding Bitcoin ETFs, Seyffart reported impressive inflows: "They have like 17 and a half to 18 billion in inflows since they launched." He noted the ETFs now hold around 920,000 bitcoin, approaching a significant milestone. "Within a year, the US ETFs will have more Bitcoin than Satoshi," Balchunas added, highlighting the rapid institutional adoption.
The Ethereum ETFs, however, have faced challenges. Seyffart admitted, "They have negative flows since launch." Despite this, Balchunas provided context: "If you took the Bitcoin ETFs off the table and you looked at the launches this year, Ether would be number one by far at a billion dollars." He noted that the BlackRock Ethereum ETF (NASDAQ:ETHA) ranks 136 overall based on flows this year for all ETFs, placing it in the top 3%.
The analysts addressed the withdrawal of Solana ETF applications, viewing it as an early step in a longer process. Balchunas compared it to Bitcoin's ETF journey, stating, "I would look at this as like the Winklevoss filing in 2013. These are the sort of like first shots you get." He suggested Solana ETFs might have better prospects under a different political administration or with the development of futures markets.
Also Read: Solana ETF Approval In 2024 Has Only A 6% Chance: 'A Snowball's Chance In Hell,' ETF Analyst Says
Why It Matters: The analysts suggested patience with Ethereum ETFs, expecting a slower adoption curve compared to Bitcoin ETFs. Balchunas explained, "I always equate the Ether to silver to gold. They'll have their own little market." He added, "It's a long game. They're off to a decent start."
The conversation also touched on the broader ETF market, highlighting record inflows across various sectors. Balchunas noted, "The breadth of flows beyond equities is a really promising sign for the industry."
A particularly interesting development was the launch of highly volatile products like leveraged MicroStrategy ETFs (NASDAQ:MSTX). Seyffart described one such product as "the most volatile ETF ever introduced in the United States," with Balchunas adding, "I believe it's 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."
What's Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga's upcoming Future of Digital Assets event on Nov. 19.
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