- ETH ETFs saw cumulative net outflows of USD1bn, but flows are stabilizing.
- Circle CEO says USDC tap-to-pay on iPhones will come soon – a potential medium-term boost to ETH.
- Two-thirds of Mt. Gox’s BTC repayments are completed, and supply pressures should fade gradually.
Outflows stabilizing across Ether ETFs
The launch timing of US spot Ether ETFs on 23 July turned out to be less than ideal, coinciding with a tech stock sell off. Ether’s high beta (~2.7) implies high losses in periods of risk aversion, and Ether prices had now seen a 30% drawdown since launch. With such a backdrop, Ether ETFs have recorded USD1bn of net outflows thus far. Outflows are mostly from Grayscale’s Ethereum Trust, while the eight other ETH ETFs have collectively drawn USD1.5bn of inflows. Nevertheless, net outflows are now showing signs of tapering.
On 15 Aug, Circle CEO Jeremy Allaire posted in social media that USDC tap-to-pay function on iPhone is “incoming soon” as Apple opens technology access to third parties. With contactless payment volumes estimated at USD2.4tn according to Allied Research, there is scope for stablecoins such as USDC to see more adoption. As stablecoin transactions typically rely on the Ethereum blockchain, a surge in payment usage should support ETH transaction volumes, boosting ETH gas fees in the future.
In Bitcoin markets, Mt Gox, the bankrupt crypto exchange, has paid out 95k BTC (~2/3 of total repayments) to creditors, with the remainder scheduled to be fully paid by end October. As most creditors acquired BTC at less than $500 prior to Mt Gox’s failure in 2014, they are more likely to sell their repaid BTC, which is the equivalent of over 300days of mining supply. The good news is that this Bitcoin supply overhang will be removed by end-Oct with full repayment, implying a more positive supply picture in Q4 for Bitcoin.
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