Ethereum ETFs Experience Slow Start with $341 Million Net Outflow in Debut Week
The spot Ethereum ETFs have recently garnered significant attention in the cryptocurrency landscape following their unexpected approval by the United States Securities and Exchange Commission (SEC). Despite the initial excitement surrounding these crypto investment products, their trading debut last week fell short of expectations.
On July 26, the spot Ethereum ETFs experienced substantial outflows for the third consecutive day since their launch on July 23. Data from SoSoValue revealed a net outflow of approximately $341 million in the first week. The market initially saw a positive influx of around $106.8 million on the first day, which was considered a strong start compared to the launch of Bitcoin ETFs earlier in the year.
However, the enthusiasm quickly waned as the spot Ethereum ETFs witnessed consecutive days of outflows. On July 24, over $133 million exited the products, followed by $152 million and $162 million on July 25 and July 26, respectively. Grayscale’s ETH Trust ETF, in particular, contributed significantly to the capital outflow, with a single-day outflow of more than $356 million on Friday.
Despite the outflows, the price of Ethereum faced challenges post the ETF launch, with a decrease of over 7% in the past week. Currently, ETH is valued at around $3,248, reflecting a 1.1% decline in the last day.
Fresh capital inflows, including ETFs, have had a more profound impact on Bitcoin compared to Ethereum. According to CryptoQuant, each dollar invested in Bitcoin has the potential to increase its market capitalization by $5, while the same dollar would only raise Ethereum’s market cap by $1.3. This disparity suggests that Ethereum’s multiplier effect in 2024 has been notably lower than that of Bitcoin.
In conclusion, while the spot Ethereum ETFs initially showed promise with a strong first-day performance, subsequent days witnessed significant outflows, impacting Ethereum’s price and highlighting the differing effects of new capital on Bitcoin and Ethereum.
