Ethereum ETFs Debut on Wall Street with Strong Start, But Face Setback with $341M Outflows
Spot Ethereum ETFs were introduced to the market with a surge of interest from investors, but have since experienced significant outflows. The launch of these ETFs took place on July 23, following approval from the SEC. Initially, the debut was promising, attracting over $106 million in net flows across nine new ETFs. However, the excitement has been tempered by some early challenges.
The arrival of spot Ethereum ETFs on Wall Street sparked considerable excitement, with $108 million flowing into these funds. This amount, however, represents only 16% of the $655 million that entered Bitcoin ETFs during a similar period. Excluding outflows from Grayscale’s ETHE and GBTC conversions, Ethereum’s share of ETF inflows rises significantly to 79%.
Despite the strong start, Ethereum ETFs have faced hurdles, witnessing three consecutive days of net outflows totaling $341.8 million after the initial surge. This trend, though disappointing, aligns with historical patterns observed with Bitcoin ETFs, which also saw early outflows before stabilizing.
The challenges encountered by Ethereum ETFs mirror the initial struggles of Bitcoin ETFs, which underwent a comparable pattern of initial outflows followed by recovery. However, the outflows from Ethereum ETFs have been notably larger than those seen with Bitcoin’s GBTC at its launch. This difference is attributed to ETHE trading at net asset value during conversions, unlike GBTC, which was trading at a discount when its spot ETFs were introduced.
Despite the promising start, demand for other Ethereum products like BlackRock’s ETHA and Fidelity’s FETH has waned, struggling to offset significant withdrawals from ETHE. The data from the initial four days of trading reveals a net outflow of $341.8 million from spot Ethereum ETFs.
Following the ETF launch, Ethereum’s price displayed some volatility but has since stabilized within the $3,200 to $3,300 range. This price movement echoes Bitcoin’s experience following its ETF launch. Despite a 3.15% correction over the past week, Ethereum has rebounded with a 4.84% increase in the last day, currently trading at $3,366, with a 24-hour high of $3,384.53 and a trading volume of $11.076 billion. If positive market sentiment persists, Ethereum could capitalize on this momentum, surpass its resistance level at $3,700, and potentially target $4,000.
As the situation evolves, the true impact of Ethereum ETFs on the market will become more evident.
