Ethereum
Ethereum Stalls After Spot ETF Day 1: Full Recap
The highly anticipated launch of several Ethereum-based exchange-traded funds (ETFs) has failed to spark a significant surge in the price of Ethereum (ETH). Despite massive trading volumes and significant inflows for the “newborn” ETFs on their first day, Grayscale’s outflows were too massive (once again) to propel the price of Ether higher.
Ethereum ETFs Start Strong, But Grayscale…
Eric Balchunas, senior ETF analyst at Bloomberg, sharing via X (formerly Twitter), “DAY ONE in the books for Eth ETFs which did $1B in total volume, 23% of what Bitcoin spot ETFs did on their first day and ETHA did 25% of IBIT’s volume.” He also noted that “the gap between ETHE and The Newborn Eight is a healthy +$625M.”
However, despite these healthy volumes, the price of Ethereum only marginally increased by 1% yesterday. At press time, ETH stood at $3,437, down 0.4% over the last 24 hours. In contrast, Bitcoin (BTC) price reduced by 1.6%, and other altcoins also saw downward pressure, falling between 4% and 10%.
James Seyffart, another Bloomberg ETF expert, commented First Day of Inflows, “The first full day of inflows for ETHness holdings has arrived. Ethereum ETFs have taken in $107 million. Black rockBitwise’s ETHA led the way with $266.5 million, followed by Bitwise’s ETHW with $204 million. A very solid first day.”
Despite the positive inflows, the day wasn’t without its challenges. The Grayscale Ethereum Trust (ETHE), which transitioned from a traditional trust to a spot ETF, saw substantial outflows of $484.9 million, or about 5% of the fund’s value. Eric Balchunas commented on the move: “Damn. That’s a lot. Like 5% of the fund. I’m not sure the newcomers at The Eight can offset inflows of that magnitude. On the other hand, it might be better to get this over with quickly, like ripping off a band-aid.”
The introduction of these ETFs is part of a broader trend following the launch of Similar Bitcoin ETFs In January, the Grayscale Bitcoin Trust (GBTC) also saw a mix of large inflows and outflows. The Ethereum Mini Trust, another Grayscale product, however, reported $15.2 million in new inflows.
Other notable Ethereum ETFs like 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 across different funds.
Overall, the first day of trading for these Ethereum ETFs generated significant volumes and complex fund flow, but did not translate into a significant increase in Ethereum prices. As with Bitcoin, Grayscale’s outflows for Ethereum appear to need to be cleared before the ETFs can have a meaningful impact on price.
At press time, ETH was trading at $3,442.
Featured image created with DALL·E, chart by TradingView.com