Ethereum ETFs Receive $107 Million Inflows on First Day, Signaling Strong Start

U.S. Ethereum exchange-traded funds (ETFs) have recently entered the market, and according to new data from Bloomberg, they have made a promising start. Despite significant outflows from Grayscale’s Ethereum Trust (ETHE) exceeding $484 million, inflows from other competitors have managed to push the overall performance into positive territory.

Leading the pack in terms of inflows are funds from BlackRock (ETHA) and Bitwise Asset Management (ETHW), with $266 million and $204 million, respectively. This has contributed to a total inflow of $590 million from these eight competitors, excluding Grayscale.

Bloomberg analyst James Seyffart highlighted the positive start for Ethereum ETFs, noting that they attracted $107 million on their debut day, which he described as a “very solid first day.”

The trading volume for these ETFs on their launch day surpassed $1.1 billion, doubling from the $600 million mark halfway through the day.

In a surprising move back in May, the U.S. Securities and Exchange Commission granted preliminary approval for ETF issuers, paving the way for these funds to be listed on exchanges. This unexpected approval caught many in the crypto industry off guard.

Looking ahead, analysts anticipate a significant influx of holdings into these ETFs over the next year, potentially boosting their total assets under management. Katalin Tischhauser, head of investment research at Sygnum Bank, suggested that aggregate assets under management could reach $5 billion to $10 billion within the next 12 months, with the bulk of new investor demand expected in the first half of 2025.

The success and growth of Ethereum ETFs will likely be influenced by the evolving U.S. political and regulatory landscape concerning the crypto industry. Recent political developments, such as Vice President Kamala Harris potentially leading the Democratic Party against former President Donald Trump in the next White House bid, could impact the direction and pace of change in the regulatory environment.

Despite these factors, Ethereum ETFs will need sustained inflows to demonstrate their attractiveness to large investors. Ryan McMillin, chief investment officer at Merkle Tree Capital, emphasized the importance of sustained demand for Ethereum ETFs to pass the real test of market fit.

Unlike Bitcoin, which saw a rally leading up to the launch of its ETFs, Ethereum did not experience a similar surge. Now, the focus is on observing sustained demand to gauge the long-term viability and success of Ethereum ETFs in the market.