U.S. ETFs Experiencing a Boom in 2024

While many took August off for vacation, the exchange-traded fund (ETF) market experienced a significant uptick in activity.

Key Points:

1. Spot Bitcoin exchange-traded funds (ETFs) experienced their worst performance in over four months on Tuesday
2. More than $287 million was pulled from the 11 U.S.-listed Bitcoin ETFs
3. The initial excitement that accompanied the launch of Bitcoin ETFs has faded in recent months

U.S. ETFs have attracted $609 billion

According to a Bloomberg report by Vidana Hajric, investors poured $75 billion into U.S. ETFs in August, a figure five times higher than the same period in 2023. Bloomberg suggested that this influx could be instrumental in driving ETF inflows toward another record-breaking annual total. Following July's massive $122 billion in inflows—the second-largest monthly intake ever—Bloomberg attributed the volatility to factors like the Federal Reserve's anticipated easing cycle and the upcoming U.S. presidential election.

So far in 2024, U.S. ETFs have attracted $609 billion, surpassing the totals of the last two years. Bloomberg data suggests that inflows could approach or even surpass the 2021 record of $911 billion. The report emphasized the importance of this momentum, especially as the ETF market nears $10 trillion, with ETFs now representing almost a third of total fund assets—double their 2015 share.

The growth of actively managed ETFs has been particularly striking, increasing by over 30% to $783 billion in 2024, while passive ETFs have grown by 15% to $8.6 trillion. Both fixed-income and equity ETFs have seen substantial demand, with inflows of $187 billion and $367 billion, respectively. Todd Sohn, an ETF strategist at Strategas, noted that bond ETFs, which attracted $100 billion in the last three months, have benefited from new offerings like BlackRock’s Flexible Income ETF (BINC) and Capital Group’s Core Bond ETF (CGCB).

Spot Bitcoin ETFs have also performed strongly

In addition to traditional bonds, spot Bitcoin ETFs have also performed strongly, pulling in over $17 billion in net inflows. More complex funds, such as covered-call and downside-protection ETFs, have further fueled growth. Leveraged and inverse funds tied to individual companies have gained traction as well, amassing over $9 billion in assets.

On Tuesday, spot Bitcoin exchange-traded funds (ETFs) experienced their worst day in over four months as investors withdrew substantial amounts of money amid a broader market decline.

According to Farside Investors, over $287 million was pulled from the 11 U.S.-listed Bitcoin ETFs, marking the largest outflow day since May 1. These ETFs began trading in January, following an SEC ruling that allowed the bundling of Bitcoin into ETFs similar to stocks and bonds.

Fidelity saw the largest redemptions, with investors selling more than $162 million in shares of its FBTC fund. Grayscale, which has experienced net outflows exceeding $19.8 billion since transitioning its trust to an ETF in January, faced $50.4 million in outflows. The Ark 21Shares fund saw $33.6 million in redemptions, while Bitwise's BITB offering experienced $25 million in sales.

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