According to CoinDesk, the performance of recently launched spot ether exchange-traded funds (ETFs) has been mixed, with significant inflows into some funds and substantial outflows from others. BlackRock's iShares Ethereum Trust (ETHA) has been notably successful, surpassing $1 billion in net inflows and ranking as the seventh-most-successful ETF launch this year. Fidelity’s Advantage Ether ETF and the Bitwise Ethereum ETF have also seen strong demand, attracting $390 million and $312 million, respectively, according to data from Farside Investors.
However, the overall picture is complicated by the significant outflows from Grayscale's Ethereum Trust (ETHE), which has lost billions. This product, initially sold to investors in 2017 and publicly traded since 2019, was converted into an ETF in July. The higher fees associated with the Grayscale product may have driven investors to shift to cheaper alternatives. Excluding the Grayscale outflows, investors have allocated over $2 billion to other ether ETFs in the first five weeks of trading.
Nate Geraci, president of the ETF Store, noted that the substantial allocation to other spot ether ETFs indicates strong investor interest in ether exposure. He acknowledged that while the debut of spot ether ETFs has not been as dazzling as that of spot bitcoin ETFs, the first month has been successful, and he expects this trend to continue. Geraci also pointed out that the outflows from Grayscale's ETHE make it challenging to gauge the true demand for ether ETFs, emphasizing the need to look beyond this product.
Sui Chung, CEO of index provider CF Benchmarks, anticipates that demand for ether ETFs will continue to grow as wealth managers and financial advisors educate their clients about Ethereum's utility and its role in a balanced investment portfolio. He believes that the educational process will highlight the key differences between Ethereum and Bitcoin, encouraging investors to consider both in their portfolios.
Spot bitcoin ETFs, which began trading in January, have seen nearly $18 billion in inflows. BlackRock’s bitcoin product has attracted roughly $20 billion, mostly offset by $17 billion in outflows from the Grayscale Bitcoin Trust (GBTC), another fund that converted to an ETF this year.
