Ethereum ETFs Drive Crypto Fund Trading Volume Higher as Bitcoin Sustains Strong Interest
Crypto investment funds experienced a significant surge in trading volume last week following the introduction of spot Ethereum exchange-traded funds (ETFs) in the United States. Despite this, there was a sharp decline in asset inflows compared to the previous week as assets exited at least one of the funds.
A report by CoinShares revealed that the combined trading volume for these funds reached $14.8 billion, the highest level since May, primarily attributed to the launch of Ethereum funds. Additionally, derivatives in this category reached a total of $99.1 billion in assets under management, with year-to-date inflows standing at $20.5 billion.
Delving deeper into the data, newly introduced Ethereum ETF funds attracted $2.2 billion in assets, representing some of the largest inflows since December 2020. The report highlighted a 542% increase in the trading volume of Ethereum-tracking exchange-traded products following the debut of spot Ethereum ETFs.
However, Grayscale’s existing Ethereum fund, which transitioned into a spot ETF last week, experienced significant outflows possibly due to traders shifting to other funds with lower fees. CoinShares also noted the launch of Grayscale’s new Ethereum Mini Trust ETF, which absorbed approximately $1 billion worth of assets from its Ethereum Trust ETF.
On another front, Bitcoin ETFs saw “healthy” asset inflows of $519 million during the same week, although this figure was lower than the previous week’s $1.27 billion. Nevertheless, these inflows brought the month-to-date total to $3.6 billion and the year-to-date total to a record $19 billion.
The continued interest in spot Bitcoin ETFs coincided with discussions around the potential establishment of a national Bitcoin strategic reserve. Former U.S. President Donald Trump hinted at this during the Bitcoin 2024 conference, while Republican Senator Cynthia Lummis also outlined a similar plan, though details remain unclear.
CoinShares suggested that the U.S. election-related comments on Bitcoin as a strategic reserve asset and the increased likelihood of a September 2024 Fed rate cut likely contributed to renewed investor confidence. The evolving landscape of crypto investment funds and ETFs continues to attract attention and investment as the market dynamics evolve.
