Close Look News

Ethereum ETFs Debut Strongly but Fall Short of Bitcoin ETF’s Epic Launch

single-image

Analysts are concerned that Ethereum (ETH) may face more challenges in attracting traditional investors compared to Bitcoin (BTC).

Stay in the know on crypto by frequently visiting Crypto News Today

Ethereum’s spot exchange-traded funds (ETFs) have had a strong start, attracting over $100 million in net inflows on their first day of trading on July 23. However, this falls short of the epic debut of Bitcoin’s ETF in January. Analysts believe that Ethereum’s ETFs may struggle to catch up to Bitcoin’s success.

CryptoCaster Quick Check:

The inflows for spot ETH ETFs were only 10% to 20% of what BTC funds received on their first day of trading in January. This is in line with expectations, considering the larger market capitalization of BTC. However, analysts are concerned that Ethereum may be a tougher sell than Bitcoin for traditional investors.

Adrian Fritz, Head of Research at 21Shares, stated that the Bitcoin Spot ETF has achieved unprecedented success in the financial world, setting new standards for ETF launches. 21Shares, known for issuing both BTC and ETH ETFs, has been a key player in this development.

Advertisement

Fritz also highlighted the contrasting narratives of Bitcoin and Ethereum, emphasizing that Bitcoin’s emergence as a store of value is straightforward and easily comprehensible, while Ethereum’s value proposition is more intricate and will require additional time and educational efforts. Despite this, Fritz expressed confidence in Ethereum’s ability to attract significant institutional interest.

According to Bryan Armour, the director of passive strategies research at Morningstar, it is anticipated that spot ETH ETFs will accumulate approximately $1 billion to $2 billion in total assets under management (AUM) within the next three months. Comparatively, Bitcoin ETFs have amassed around $12.7 billion over a similar timeframe, and it is projected that ETH ETFs will capture approximately 10% to 15% of that amount.

Initial trading data suggests a notable increase in institutional interest, as highlighted by Armor. The first day of trading witnessed substantial volumes, a common indicator of institutional involvement in the market.

The influx of funds helped ease concerns surrounding the highly-anticipated ETF debut. Following the listing of the ETFs, the Ethereum Volmex Implied Volatility (EVIV) index, which gauges the expected volatility of ETH over the next 30 days, decreased by 4 points to approximately 65, as reported by Coinmarketcap.

Advertisement

Before the launch of the ETH ETF, there was uncertainty in the market regarding potential inflows. Cole Kennelly, the founder of Volmex Finance, emphasized that the subsequent decrease in volatility post-trading debut suggests that market participants anticipate a stabilizing impact on ETH spot markets from the ETF flows.

Three leading Ether ETFs, including Blackrock’s iShares Ethereum Trust ETF (ETHA), Bitwise Ethereum ETF (ETHW), and Fidelity Ethereum Fund (FETH), have significantly outperformed their competitors in attracting investor inflows, as stated by Armour. These funds collectively received approximately $266 million, $204 million, and $71 million in net inflows, based on Bloomberg data.

Armour credited the funds’ impressive performance to the robust distribution networks and institutional clientele of Blackrock and Fidelity, as well as Bitwise’s effective engagement with individual investors in the crypto space. This strategic approach has evidently paid off, leading to significant inflows and positive results for the funds.

However, the Grayscale Ethereum Trust (ETHE) experienced outflows amounting to approximately $484 million, despite its establishment in 2017 under a different fund structure. The management fees of ETHE, which are notably higher compared to newer spot ETH funds, may have contributed to this trend. On the other hand, the eight new spot ETH ETFs that debuted on July 23 attracted around $590 million in net inflows, as reported by Bloomberg.

Eric Balchunas, an ETH Analyst at Bloomberg, expressed surprise at the substantial inflows of $590 million on the first day of trading for the new spot ETH ETFs. He also noted the significance of this achievement, especially considering the larger-than-expected unlock of $ETHE. Starting off with a positive net inflow of +$106 million is indeed a promising beginning for these new ETFs in the market.CRYPTOCASTER® - DECENTRALIZED FREEDOM!


We hope you found this article insightful. Before you go, please consider supporting CryptoCaster’s independent journalism.

In the world of media owned by billionaires like Elon Musk, Larry Fink (BlackRock), and Jamie Dimon (JP Morgan Chase), influence over narratives surrounding cryptocurrency and Web3 often reflects their interests. CryptoCaster is different. With no billionaire backers or shareholder obligations, we are committed solely to public interest journalism, covering crypto advancements and institutional changes without profit-driven motives.

Unlike much of mainstream media, which can fall into neutrality traps that obscure the real impacts on retail investors, we’re guided by transparency and integrity. We are unafraid to take a stand in the ongoing struggle against fiat banking dominance and in support of the monetary innovation driven by crypto and Web3. Reporting on issues like FTX, Binance, and Ripple, we bring a bold, unfiltered outsider’s view on global financial disruption—free from the constraints of traditional media narratives.

CryptoCaster remains paywall-free, accessible to everyone, thanks to the support of readers like you. Your contributions keep us independent and help ensure that critical information on the crypto landscape reaches all. If you value our work, please consider supporting us with a one-time contribution starting at just $1 in Bitcoin or Ether, or even monthly if you’re able. Scroll down to find our wallet addresses and help keep CryptoCaster independent and thriving.

Thank you for your support,

Kristin Steinbeck
Editor, CryptoCaster


Please Read Essential Disclaimer Information Here.
© 2024 Crypto Caster provides information. CryptoCaster.world does not provide investment advice. Do your research before taking a market position on the purchase of cryptocurrency and other asset classes. Past performance of any asset is not indicative of future results. All rights reserved.


Contribute to CryptoCaster℠ Via Metamask or favorite wallet. Send Coin/Token to Addresses Provided Below.
Thank you!
BTC – bc1qgdnd752esyl4jv6nhz3ypuzwa6wav9wuzaeg9g
ETH – 0x7D8D76E60bFF59c5295Aa1b39D651f6735D6413D
SOL – DLvdMu85dW6pZMhw2E4S3pp81qQQGpy5UcdTsFEFBu4b
LITECOIN – ltc1qxsgp5fykl0007hnwgl93zr9vngwd2jxwlddvqt


CRYPTOCASTER HEATMAP


You may also like