James Seyffart, a prominent ETF analyst at Bloomberg Intelligence, shared his insights on the current state of Bitcoin (CRYPTO: BTC) and Ethereum (CRYPTO: ETH) ETFs, providing context on the recent slowdown in inflows.
What Happened: In a recent podcast, Seyffart highlighted the success of spot Bitcoin ETFs, which have taken in $12-13 billion since their launch on Jan. 11. “Bunch of these ETFs are some of the best launches in history,” he noted, with BlackRock‘s iShares Bitcoin Trust (NASDAQ: IBIT) arguably “the best launch in history.”
However, Seyffart also pointed out that inflows have started to stagnate. IBIT experienced its first day without an inflow after a record-breaking 72-day streak. He emphasized that this is normal for ETFs and that “crypto Twitter is kind of in this bubble where they think it should be inflows every single day, and that is not going to be the case.”
When asked about the potential impact of retirement accounts and institutional investors on Bitcoin ETFs, Seyffart explained that while some independent advisor shops and retail investors have bought in, larger platforms and advisor networks are still going through due diligence processes.
“Usually, you’d say at least three months, likely even six months for that to happen,” he added.
Regarding the possibility of an Ethereum ETF by the end of the year, Seyffart expressed skepticism, stating that 2025 is more likely. He believes that the SEC will likely “kick the can down the road” and that decisions may be influenced by the upcoming election in November.
Seyffart also touched on the upcoming Hong Kong ETFs, which will offer both Bitcoin and Ethereum spot ETFs with in-kind creation and redemption. While he believes this could be huge in the long term, he cautioned against overhyping their immediate impact due to the relatively small size of the Hong Kong market compared to the US.
Why It Matters: Seyffart’s comments come amid price consolidation for Bitcoin and growing concerns about the risks associated with spot Bitcoin ETFs.
Jim Bianco, founder of Bianco Research, pointed out that ETFs are primarily held by “paper-handed small-time traders” rather than institutional investors. He warned that if the price of Bitcoin drops below the average purchase price of around $58,000, it could trigger significant selling pressure from these “paper hands” investors.
Bloomberg ETF analystEric Balchunas pushed back against Bianco’s thesis, arguing that it’s too early to draw definitive conclusions about the long-term prospects of these ETFs.
What’s Next: These topics are expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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