Divergence in Global Bitcoin ETF Flows: US Outflows Contrast Hong Kong Inflows

CoinShares' latest weekly report reveals a stark contrast in the flows of Bitcoin-related investment products between the United States and Hong Kong, with US Bitcoin ETFs experiencing record outflows while their Hong Kong counterparts thrive.

Bitcoin ETFs Drive US Market Outflows: Newborn Nine Dominates

The US market witnessed its fourth consecutive week of negative flows, with a total outflow of $251 million. The majority of these outflows, amounting to over 60% or $156 million, were attributed to the newly issued Newborn Nine spot Bitcoin ETFs. CoinShares' head of research, James Butterfill, suggests that automatic sell orders may have been triggered as the price of Bitcoin fell below the average purchase price of these ETFs since launch.

Among the US Bitcoin ETFs, Fidelity's FBTC and Ark 21 Shares' ARKB saw the highest outflow amounts, with $131 million and $84 million exiting the funds, respectively. Additionally, Grayscale's Bitcoin ETF continued its outflow trend, with $277 million withdrawn during the period.

Table showing the year-to-date, month-to-date, and weekly crypto ETP flows (Source: CoinShares)

Hong Kong Leads Crypto Inflows: Ethereum Rebounds Amid Altcoin Interest

In contrast to the US, Hong Kong witnessed a surge in inflows for newly launched spot-based Bitcoin and Ethereum ETFs, totaling $307 million during the first week of trading. This highlights a significant appetite for crypto investment products in the Hong Kong market.

While Bitcoin saw outflows totaling $284 million, altcoins like Avalanche, Cardano, and Polkadot saw modest inflows. Notably, Ethereum broke its 7-week spell of negative flows, attracting $30 million in inflows last week and reducing its year-to-date outflow to a negative of $20 million.

Table showing the year-to-date, month-to-date, and weekly crypto asset flows (Source: CoinShares)

Divergent Bitcoin ETF Flows: US vs. Hong Kong Investor Sentiments

The contrasting trends in Bitcoin ETF flows between the US and Hong Kong reflect differing investor sentiments and market dynamics. While US investors seem to be reducing exposure to Bitcoin ETFs, Hong Kong investors are embracing them enthusiastically. Additionally, the resurgence of Ethereum inflows and modest altcoin inflows suggest a diversification trend among crypto investors.

The divergence in Bitcoin ETF flows between the US and Hong Kong underscores the global variation in crypto investment behavior and regulatory environments. As investors navigate these differing landscapes, trends in ETF flows serve as indicators of evolving market sentiment and investment preferences.