- Ethereum ETFs have recently gone live for trading.
- The performance of the ETFs has taken a reverse course.
- The downward pressure has impacted ETH’s price.
The long-awaited Ethereum exchange-traded funds recently obtained the regulatory greenlight of the Securities and Exchange Commission (SEC), approved for trading on July 22, 2024. Before their launch, speculation abounded about how these new investment vehicles would perform, especially in comparison to the impressive debut of their predecessor, the Bitcoin ETF.
However, just two days in, the outlook for the newly launched Ethereum ETFs is already looking grim.
Ether ETFs Shed Millions
Ethereum ETFs declined on their second day of trading, with the assets recording a net outflow of $133.16 million. Grayscale’s ETH Trust ETF alone accounted for $327 million of the funds, continuing a downward trend from the $484 million recorded on day one.
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Strong performances from other issuers somewhat offset the outflows. Fidelity’s FETH led the charge with an impressive $74.46 million in investments, followed by Grayscale’s Ethereum Mini Trust with approximately $45.93 million. Additional support came from Bitwise’s ETHW, which attracted $29.64 million, VanEck ETHV with $19.84 million, and BlackRock’s iShares Ethereum Trust (ETHA), which drew in $17.44 million.
However, inflows across the issuers are significantly lower than their first-day performance, which saw issuers including BlackRock and Bitwise each attract $266 million and $204 million, respectively.
The weight of the underperformance has extended to Ethereum’s trading price.
Ethereum Slides 7%
Currently trading at $3,160, Ethereum (ETH) has dropped approximately 7.6% in the last 24 hours. The ongoing decline, which began around 7:00 UTC, is suspected to have an immediate impact on the Ethereum ETFs, exerting downward pressure on the asset.
The current performance of the ETFs contradicts expectations that the newly-launched investments would ripple through the market and drive an uptick. Ethereum’s current trading price marks a 28.4% decrease from its peak value of $4,000 this year.
Despite their initial underperformance, the Ethereum ETFs are still in their early days, and their long-term impact and overall performance remain to be seen.
On the Flipside
- The ETFs’ performance lags behind their predecessor, Bitcoin ETFs, which had a streak of inflows upon launch.
- Grayscale’s ETH ETF, despite its low fees, is falling short of analysts’ expectations for a strong performance.
- The total net asset value of Ethereum spot ETFs is $9.54 billion.
Why This Matters
While most Ethereum ETFs saw some inflows, Grayscale’s ETH Trust ETF’s severe underperformance casts a shadow over the overall performance, fueling negative sentiment. Moreover, the stark contrast between the funds recorded on day two and day one highlights a shift in investor sentiment, suggesting growing skepticism in the market.
Read this article about some predictions for Ethereum ETFs:
Bitwise Predicts $15B Ethereum ETF Inflows Amid Approval Hopes
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