Ethereum ETFs Are Not Like Bitcoin ETFs (So Far)

3 months ago 29

A few months after the SEC gave the initial green light, the spot Ethereum ETFs officially hit the ground last Tuesday.

However, the immediate results have been quite underwhelming, and one can’t help but compare them to the spot Bitcoin ETF launch in January this year.

ETH ETFs Vs. BTC ETFs

CryptoPotato reported earlier this week that the nine spot Ethereum ETFs had a solid first day, gathering more than $106 million in net flows. As expected, the converted Grayscale fund (ETHE) saw substantial withdrawals of almost $500 million, but the flows toward the rest (especially ETHA and ETHW) managed to alleviate the pain.

However, the following three days were quite different as the trend quickly changed. Instead of overall inflows, the daily numbers turned red, with $133.3 million taken out on July 24, $152.4 million withdrawn on July 25, and $162.7 million pulled out on July 26.

It is a worrying trend since the outflows are actually growing. Grayscale’s ETHE lost $326.9 million, $346.2 million, and $356.3 million, respectively, in those three days.

However, the demand for the remaining products, even for BlackRock’s ETHA and Fidelity’s FETH, has been diminishing, and they were unable to make it up for the massive withdrawals from ETHE. As such, the numbers after the first four days of trading show $341.8 million taken out of the spot Ethereum ETFs.

There’s a stark contrast compared to the first four days of spot Bitcoin ETFs. The launch date saw more than $650 million in inflows, the second $203 million, and the fourth $453.8 million. Minor outflows were seen only on the third day ($52.7 million). The net flows in total were close to $1.260 billion in just four days, highlighting the enormous difference compared to the Ethereum ETFs.

What About Price Performances?

Although the difference in demand for the two largest cryptocurrencies is more than evident (for now, at least), the price performances of the underlying assets for the first several days of trading after the launch of their respective ETFs have been unexpected.

With more than $1.250 billion entering the BTC ecosystem, one could imagine that bitcoin’s price would be on a tear. But, they will be wrong. The cryptocurrency skyrocketed from $45,000 to $49,000 after the ETFs hit the markets on January 11, but slumped to $41,300 by the fourth day.

Bitcoin/Price/Chart 27.07.2024. Source: TradingView

ETH, on the other hand, began with a price dump from $3,500 to $3,000, which was somewhat anticipated given the outflows, but bounced off and currently sits close to $3,300. As such, ether is down by just 6.5% now, despite the substantial outflows, while BTC plummeted by 16% even though the ETFs were a massive success in their early days.