The long-awaited launch of several Ethereum-based spot exchange-traded funds (ETFs) failed to spark a significant price rally for Ethereum (ETH). Despite significant trading volumes and vast inflows for the “newborn” ETFs on day one, Grayscale outflows were too vast (once again) to push Ether higher.
Ethereum ETFs Off to a Strong Start, But Grayscale…
Eric Balchunas, Senior ETF Analyst at Bloomberg, common via X (formerly Twitter), “FIRST DAY on the books for Eth ETFs hitting $1B in total volume, which is 23% of what spot bitcoin ETFs hit on day one, with ETHA hitting 25% of IBIT volume.” He also noted that “the spread between ETHE and The Newborn Eight is a healthy +$625M.”
However, despite these well volumes, Ethereum was only up slightly by 1% yesterday. At the time of going to press, ETH was trading at $3,437, down 0.4% in the past 24 hours. In contrast, Bitcoin (BTC) was down 1.6%, and other altcoins were also facing downward pressure, falling between 4% and 10%.
James Seyffart, another Bloomberg ETF expert, he commented first day of inflows, “The first full day of inflows for ETHness shares is now underway. Ethereum ETFs took in $107 million. BlackRock’s ETHA led with $266.5 million, followed by Bitwise’s ETHW with $204 million. A very solid first day.”
Despite these positive inflows, the day was not without its challenges. The Grayscale Ethereum Trust (ETHE), which transitioned from a classic trust to a spot ETF, saw significant outflows of $484.9 million, or about 5% of the fund’s value. Eric Balchunas commented on the move, “Holy shit. That’s a lot. About 5% of the fund. I’m not sure The Eight’s rookies can sustain inflows of that size. Then again, maybe it’s better to just end it quickly, like ripping off a band-aid.”
The launch of these ETFs is part of a broader trend following the launch of similar Bitcoin ETFs in January, which also saw a mix of inflows and significant outflows from the Grayscale Bitcoin Trust (GBTC). The Ethereum Mini Trust, another Grayscale product, however, saw $15.2 million in novel inflows.
Other notable Ethereum ETFs such as Franklin Templeton (EZET) and 21Shares’ Core Ethereum ETF (CETH) saw inflows of $13.2 million and $7.4 million respectively, indicating varying levels of investor interest in each fund.
Overall, the first day of trading for these Ethereum ETFs saw significant volume and compounded fund flows, but it did not translate into a significant augment in Ethereum prices. Similar to Bitcoin, Grayscale’s outflows for Ethereum appear to need to be cleared before the ETFs can have a significant impact on price.
At the time of going to press, the ETH price was $3,442.
Featured image created with DALL E, chart from TradingView.com
