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Fineqia’s Greco reports neutral flows for BTC Spot ETFs

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Matteo Greco, Research Analyst Fineqia International has published his weekly note on the digital asset markets, noting that bitcoin (BTC) ended the week at approximately USD62,775, marking a 0.7 per cent decrease from the previous week’s closing price of around USD63,200.

Greco writes: “The week started with strong selling pressure on Monday, causing the BTC price to dip as low as USD58,400 before bouncing back above the USD60,000 level. The price then fluctuated between USD60,000 and USD62,000 before gaining stronger momentum on Sunday, closing the week at about USD62,775.

“BTC Spot ETFs saw neutral flows last week, with a USD37 million outflow. The net outflow occurred entirely on Monday, amounting to about USD175 million, followed by four days of slightly positive flows, breaking a streak of seven consecutive trading days with net outflows. The total inflow since inception is now USD14.5 billion, with cumulative trading volume surpassing USD300 billion, reaching approximately USD311.8 billion.”

Greco notes that the significant influence of BTC Spot ETFs on the digital assets market is evident from the distribution of trading volume throughout the week. From January to June 2024, weekend trading volume accounted for only 16 per cent of the total, the lowest ever recorded for this period (H1 of a year). This indicates increased activity from traditional finance investors, with trading volume concentrated during Monday to Friday and particularly strong during US market hours, decreasing after the US market closes.

Meanwhile, ETF issuers continue discussions with regulators to launch Ethereum (ETH) Spot ETFs. Greco writes that rumours suggested that ETH Spot ETFs might go live in the first week of July, but the recent SEC request to amend and resubmit the S-1 documents by 8th July is likely to push the potential approval after mid-July. Gary Gensler has previously indicated that trading might not begin until September, but market participants expect a faster process, with trading starting in a few weeks, he says.

Greco also notes that, in a sign of increasing traditional finance adoption of digital assets, VanEck and 21Shares, two prominent issuers, have filed for Solana (SOL) Spot ETFs.

“VanEck claims that SOL is a commodity, similar to BTC and ETH, which contrasts with the SEC’s stance last year, categorising various digital assets, including SOL, as potential securities. Additionally, SOL’s lack of a futures market in the US raises further questions regarding liquidity and market fairness, potentially slowing the approval process.”

Greco concludes: “Despite these challenges, the approval and launch of BTC Spot ETFs, the anticipated launch of ETH Spot ETFs, and the recent SOL Spot ETF filings highlight the growing interest and adoption of digital assets by traditional finance service providers and investors. This trend projects a positive outlook for the digital assets market in the mid to long term, with increased establishment in financial markets, accompanied by rising inflows, liquidity, and transparency.”

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