The launch of new Ether exchange-traded funds (ETFs) faced significant challenges, with nearly $750 million flowing out of these funds over four of the five initial trading days.
However, on July 30, the trend shifted as net inflows across all nine spot Ether ETFs reached $33.6 million, marking the first day of positive flows since the launch.
According to Nansen’s data, this trend differs significantly from the debut of Bitcoin ETFs, highlighting distinct regulatory conditions.
On July 30, Bitwise surpassed BlackRock in trading volume, aided by Bitwise’s decision to waive its 0.2% fee for the first six months to encourage inflows.
However, as of July 31, BlackRock regained its lead in trading volume, accounting for 5.59% of assets under management (AUM).
Regulatory scrutiny has played a crucial role in the development of Ether ETFs.
The U.S. Securities and Exchange Commission (SEC) has previously raised concerns about the staking aspects of Ethereum’s proof-of-stake (PoS) consensus mechanism.
Consensys addressed these concerns on March 31, asserting that Ethereum’s PoS mechanism “meets and even exceeds the security of Bitcoin’s proof-of-work (PoW),” which the SEC has already approved for trading.
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Despite the regulatory hurdles, there is a notable divide in investor interest in crypto ETFs.
On July 25, BlackRock indicated that client interest is primarily concentrated on Bitcoin and Ethereum ETFs.
At the Bitcoin 2024 conference, Robert Mitchnick, BlackRock’s head of digital assets, noted that while interest in Ethereum exists, it diminishes significantly beyond BTC and ETH products.
On July 18, Bitwise’s chief investment officer, Matt Hougan, expressed optimism about the future impact of U.S. spot Ether ETFs on the asset’s price.
He acknowledged potential volatility in the initial weeks, especially as the Grayscale Ethereum Trust transitions to an exchange-traded product (ETP), but predicted new highs for Ether by the end of 2024.
Hougan’s optimism is based on Ethereum’s widespread use, the forced sell-offs by BTC miners, and the substantial portion of ETH (around 28%) locked away through staking.
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