Ethereum ETFs’ Launch Week
YEREVAN (CoinChapter.com) — The new U.S. spot Ethereum ETFs launched last week, attracting significant attention and capital. Eight funds saw notable inflows totaling over $1 billion, while Grayscale’s ETHE experienced $1.5 billion in net outflows.
Mixed Start for New Spot Ethereum ETFs: Inflows and Significant Outflows
Nine new spot Ether ETFs from eight issuers hit the market last Tuesday. These funds had been eagerly anticipated since gaining SEC approval in May. BlackRock’s ETHA led the pack, generating $442 million in net inflows within the first four days. Bitwise’s ETHW followed with $265.9 million, and Fidelity’s FETH brought in $219.4 million. Other notable funds included VanEck’s ETHV with $35.4 million, Franklin Templeton’s EZET at $23.3 million, Invesco’s QETH with $14.2 million, and 21Shares’ CETH with $7.5 million.
Grayscale’s ETHE saw over $1.5 billion in net outflows, bringing the total net outflow for all U.S. spot Ethereum ETFs to $341.8 million. This outflow overshadowed the positive performance of the other funds.
Ethereum ETF Flow Analysis. Source: Farside Investors Comparing Ethereum ETFs to Bitcoin ETFs
The Ethereum ETFs’ first-week performance was solid but fell short compared to the Bitcoin ETFs launched in January. The Bitcoin ETFs saw a total net inflow of $1.26 billion in their first four days. Excluding ETHE, the new Ethereum ETFs generated 40% of the net inflows that Bitcoin ETFs did, with $1.17 billion compared to $2.89 billion.
Nate Geraci, President of The ETF Store, noted,
“Ex-ETHE, well over $1 billion came into spot ETH ETFs this week. A portion was recycled from ETHE, but nowhere close to the primary driver.”
Nate Geraci’s Insight on Ethereum ETFs. Source: @NateGeraci
He highlighted the significant investor interest in ether via traditional financial products.
Grayscale’s ETHE Market Impact and Fee Comparison
Grayscale’s ETHE had a dramatic impact on the market. Initially launched as a private placement in 2017, ETHE began public trading on OTC Markets in mid-2019 before being uplisted to NYSE Arca last week. ETHE charges a higher fee of 2.5%, compared to the 0.19% to 0.25% post-waiver fees of other spot Ethereum ETFs. Grayscale also launched the Mini Trust ETH ETF with a lower fee of 0.15%.
From its $10 billion in assets (2.9 million ether) before conversion, $9.2 billion went to ETHE, and over $1 billion to ETH. Despite inflows of $164 million to ETH, ETHE’s substantial outflows reduced its assets under management to about $7.5 billion (2.28 million ether).
Ethereum ETFs Achieve Strong Trading Volume in First Week
In their first week, the spot Ethereum ETFs generated $4.05 billion in trading volume, making up 34% of the $11.82 billion volume from the Bitcoin ETFs’ launch. ETHE dominated with a 52% market share, followed by BlackRock’s ETHA (21.7%), Grayscale’s ETH (12%), and Fidelity’s FETH (8.4%).
The Bitcoin ETFs saw lower volumes last week, recording $7.35 billion. The Ethereum ETFs outpaced analysts’ expectations, achieving 55% of the Bitcoin ETFs’ volume for the same period.
Global Perspective and Future Outlook
Globally, digital asset investment products had $245 million in net inflows last week. Bitcoin investment products led with $519 million, bringing July’s total to $3.9 billion. According to CoinShares Head of Research James Butterfill,
“The U.S. electioneering comments around bitcoin as a potential strategic reserve asset, and the increased chances for a September 2024 FED rate cut are the likely reason for renewed investor confidence.”
Weekly Crypto Asset Flows Chart. Source: CoinShares
The launch of U.S. spot Ethereum ETFs saw significant inflows, with newly issued ETFs receiving $2.2 billion. However, considering ETHE’s net outflows, Ethereum-based investment products saw a total net outflow of $285 million globally. Crypto investment products now manage $99.1 billion in assets, with a record-breaking $20.5 billion in net inflows year-to-date.
Ether is trading at $3,371.55, up 3.24% in the last 24 hours, with a market cap of $405,355,905,145. The 24-hour trading volume is $12,547,157,283, which is down 15.50%. The circulating supply stands at 120,228,315 ETH.
Ethereum Price Surge Post-ETF Launch. Source: CoinMarketCap
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