Author: Jack Inabinet, Bankless; Translated by: Baishui, Golden Finance
Spot Ethereum ETFs have completed a full day of trading, which has left everyone wondering: How are these products performing?
While many were disappointed that the price of ETH was fairly stagnant on launch day, trading in a relatively tight range, moving just 5% and closing almost flat, by all accounts these launches could have been much worse.
Bitcoin plunged 6% to a new cycle high after its ETF was launched, and holders suffered a huge loss of 10% the next day.
On its first day of trading, the spot ETH ETF saw over $1 billion in volume, with the newly launched non-ETHE fund ranking first among new ETFs in the past 12 months (excluding the very successful BTC ETF).
While Grayscale’s ETHE saw outflows of $470 million yesterday, five times more than when GBTC allowed redemptions following its conversion to a spot ETF on January 11, GBTC’s persistent discount on the first day initially limited redemption activity.
Excluding the large ETHE outflows, the newly launched spot ETH ETF product received $484 million in inflows, which may indicate excessive investor demand for ETH.
While many ETHE redemptions are likely being recycled into alternative products with no impact on net flows, this is equivalent to 79% of the inflows received by the newly launched spot BTC ETF on its debut, an achievement many consider impressive given that ETH has only one-third of BTC’s market cap.
Day one inflows are undoubtedly encouraging for spot ETH ETFs, but their launch is just one milestone in Ethereum’s marathon journey to replace the legacy financial system.
With the world’s largest asset managers now having a direct incentive to promote Ethereum investing, there is hope that the mainstream will finally understand the benefits of permissionless blockchains.
Now, it remains to be seen whether the new types of investors that the ETF aims to attract can actually be converted into on-chain believers; in which case the resulting inflows could push ETH prices (and adoption) to new all-time highs.
