The spot Ethereum ETFs have been officially launched after receiving approval from the SEC a few months ago. However, the immediate results have been quite underwhelming, leading to comparisons with the launch of spot Bitcoin ETFs earlier this year. While the nine spot Ethereum ETFs saw a solid first day with over $106 million in net flows, the following days painted a different picture.
In the days following the launch of spot Ethereum ETFs, there has been a worrying trend of growing outflows. Daily withdrawals reached $133.3 million, $152.4 million, and $162.7 million on July 24, 25, and 26 respectively. Grayscale’s ETHE suffered significant losses, with $326.9 million, $346.2 million, and $356.3 million being withdrawn in the same three days. Even other products such as BlackRock’s ETHA and Fidelity’s FETH failed to make up for the massive outflows from ETHE. In total, $341.8 million was taken out of the spot Ethereum ETFs in the first four days of trading.
The contrast between the launch of spot Ethereum ETFs and spot Bitcoin ETFs is stark. The Bitcoin ETFs saw more than $650 million in inflows on the launch day, followed by $203 million and $453.8 million on the second and fourth days respectively. Only minor outflows were observed on the third day. The total net flows for Bitcoin ETFs amounted to close to $1.260 billion in the first four days, highlighting the significant difference in demand between the two largest cryptocurrencies.
Despite the difference in demand, the price performances of Bitcoin and Ethereum following the launch of their respective ETFs were unexpected. Bitcoin’s price surged from $45,000 to $49,000 on January 11 but dropped to $41,300 by the fourth day. Ethereum, on the other hand, initially dropped from $3,500 to $3,000 but has since rebounded to around $3,300. This resulted in a 6.5% decline in Ethereum’s price compared to a 16% drop in Bitcoin’s price, despite the success of the ETFs in their early days.
The launch of spot Ethereum ETFs has been less successful compared to spot Bitcoin ETFs in terms of investor interest and price performance. The growing outflows and lackluster demand for Ethereum ETFs raise concerns about the future of these products in the market. It remains to be seen whether Ethereum can catch up to Bitcoin in the ETF space or if it will continue to lag behind in terms of investor confidence.
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