A U.S.-traded spot Ethereum (ETH) exchange-traded fund (ETF) recorded net outflows of $476 million in its first month of trading, unable to overcome outflows caused by Grayscale’s ETHE unlock.
Bloomberg senior ETF analyst Eric Balchuna praised the “heroic” performance of the Newborn Nine Spot Bitcoin (BTC) ETF, which saw inflows far dwarfing the massive outflows experienced by GBTC.
This performance contrasts with the $5 billion in inflows that a Bitcoin ETF recorded over a similar period after its launch.
Analysts cite several factors as the reason for this disparity, including Bitcoin’s “first-mover advantage,” the lack of staking options for Ethereum ETFs, and reduced liquidity in the Ethereum market, making these ETFs less attractive to institutional investors.
Despite these challenges, some Ethereum ETFs showed signs of recovery towards the end of the month. Balchunas added that the outflows won't last forever and that inflows into newly launched ETFs will eventually catch up with the outflows. He said:
“But the good news is that unlocking is over and there is light at the end of the tunnel.”
Over $2 billion inflows
According to data from Far Side Investors, Grayscale's ETHE lost roughly $2.6 billion in its first month, a move that was expected as the same thing happened with the company's Bitcoin trust GBTC.
While other Ethereum ETFs' inflows were insufficient to ensure positive net inflows for the month, the amount of cash funneled into these cryptocurrency products was still significant.
Inflows into BlackRock's ETHA exceeded $1 billion, making it the seventh-largest ETF by inflows so far this year, according to the published list.
Fidelity's FETH also saw strong inflows of around $393 million, making it the 19th largest ETF by inflows YTD, while Bitwise's ETHW became the third and last U.S.-traded Ethereum ETF to garner over $300 million in inflows in its first year.
moreover, Grayscale's ETHE mass exodus, Ethereum Minitrust, ETH, It attracted inflows of about $240 million.
If the total inflows of U.S.-traded Ethereum ETFs were pooled into a single product, it would be the fourth-largest exchange-traded fund by inflows in 2024.
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