Weekly Update: 31st of July
What happened between the 24th and 31st of July?
- The Ether spot ETFs experienced four days of net outflows, all contributed to Grayscale’s Ether ETF which is the only instrument experiencing outflows, this scenario is similar to the launch of the Bitcoin ETF. Read more
- Franklin Templeton stated that it’s optimistic about more digital assets ETFs, including a Solana ETF instrument, which could imply that we might see a third filing for a Solana ETF. Read more
- Donald Trump spoke at the Bitcoin Conference in Nashville discussing various points, including promising that he will end the war on crypto and that the US shouldn’t sell any of its Bitcoin holdings. Read more
- According to BlackRock’s chief investment officer for ETFs, crypto-based ETFs will enter “model portfolios” as we move toward the end of 2024. Read more
Grayscale turns Ether spot ETF market red
On July 23rd, nine Ether spot ETFs began trading on various U.S. exchanges, drawing significant attention from traders and investors. By the end of the trading day, these ETFs saw a net inflow of $106.6 million, while Grayscale's ETHE ETF experienced a $484 million outflow. Grayscale's ETHE has notably higher fees (2.50%) compared to its counterparts (average of 0.25%), leading to substantial outflows. As a result, over its total five trading days, ETHE lost 19.8% of its assets, a faster pace than its Bitcoin ETF, which took 13 days to reach similar losses. Despite the current selling pressure, we expect this to decrease over time, allowing other ETFs' inflows to surpass Grayscale's outflows.
Franklin Templeton sees the potential of a Solana ETF
As the U.S. asset manager launched its Ether spot ETF, Franklin Templeton hinted at future digital asset ETFs in a statement. They mentioned exciting developments beyond Ethereum and Bitcoin, including Solana. This threw more oil on the speculation fire of Solana, especially since VanEck and 21Shares filed Solana ETF applications with the SEC in June. However, it will take some time before we witness the introduction of a Solana-based ETF as industry analysts expect the final decision from the SEC around the middle of March 2025. Nevertheless, it seems that the dam has broken and that we might see more of these applications also for other digital assets.
Donald Trump speaks at Bitcoin 2024
On the 27th of July, Donald Trump spoke at the Bitcoin 2024 conference in Nashville, where many eagerly awaited his remarks on Bitcoin and the digital assets industry. He did not disappoint. Trump began by stating that he would end the war on digital assets and aimed to make the U.S. the “crypto capital of the planet.” He also promised that the U.S. would not sell its Bitcoin holdings. However, the cherry on the cake was that Trump pledged to fire Gary Gensler, the current Chair of the SEC, on day one. While these comments should be taken with a grain of salt, as they were made at a digital assets rally, it appears that Trump has made a significant shift in his stance on the market, suggesting a potential future for digital assets in the U.S. Do you want to read more about Trump’s potential impact on the digital assets market when re-elected? Read our latest blog using this link.
Digital assets ETFs will find their way into “model portfolios”, according to BlackRock
On July 29th, Sandra Cohen, BlackRock’s Chief Investment Officer for ETFs, stated in a Bloomberg interview that digital asset ETFs will gradually be integrated into model portfolios. These portfolios, offered by firms like Morgan Stanley, Wells Fargo, and UBS, aim for a balanced risk-return strategy. Cohen mentioned that these firms are conducting risk analytics and due diligence on Bitcoin and Ethereum and its role within a portfolio. She noted that while Bitcoin and Ether are different asset classes, they can serve as effective portfolio diversifiers. BlackRock anticipates that model portfolio management will grow from $4.2 trillion to $10 trillion in the next five years.
In other digital assets news
- Increasingly popular blockchain network Ton introduces gasless transactions following the launch of its new smart wallet standard.
- On the 25th of July, Slovenia launched its first digital sovereign bond via BNP Paribas, worth $32.5 million. BNP used its Neobonds platform to issue the bond which operates on the Canton Network.
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