Ethereum ETFs Day 2 Outflows Drown Opening Day Gains

• Ethereum ETFs debuted strongly, followed by outflows on the second day.
• The overall trend was negative, but some ETFs have attracted strong inflows.
• Trading volume has already started to see a dip.

The much-anticipated launch of spot Ethereum ETFs in the US markets got off to a rollercoaster start. The first day saw a flurry of activity, with investors pouring money into these new financial products that promised easy exposure to the world’s second-largest cryptocurrency. But the excitement seemed to wane by day two, with a net outflow dampening the initial optimism.

Overall, US spot Ethereum ETFs saw a net outflow of $133.16 million on Wednesday, according to data from SoSoValue. This reversed the positive trend from Tuesday when these ETFs debuted with a net inflow of $106.7 million.

Ethereum ETFs See Mixed Performance

While the overall trend was negative, individual performances within the new Ethereum ETF landscape offered some bright spots. Fidelity’s FETH led the pack for inflows with a healthy $74.46 million, followed by Grayscale Ethereum Mini Trust ($45.93 million), Bitwise ETHW ($29.64 million), and VanEck ETHV ($19.84 million). 

Even BlackRock’s iShares Ethereum Trust (ETHA), which had a strong showing on Tuesday, managed to attract $17.44 million in net inflows on Wednesday, albeit significantly lower than the prior day’s $266.55 million.

Grayscale’s ETHE seems to be the culprit behind the overall outflow. This fund, which recently converted from a lock-up investment vehicle to a spot ETF, witnessed a staggering outflow of $326.86 million. This significant exodus is likely due to the newfound flexibility ETHE offers investors, allowing them to exit their positions more easily than the previous lock-up structure.

Ethereum ETF Trading Volume Slips

The trading volume for spot Ethereum ETFs also reflected a decline on Wednesday, falling to $951 million compared to Tuesday’s $1.05 billion. This could signal a decrease in investor interest in Ethereum compared to the excitement of the initial launch day.

In conclusion, the first two days of trading for spot Ethereum ETFs have presented a story of cautious optimism. While some new funds attracted inflows, the sizable outflow from Grayscale’s ETHE dampened the overall sentiment. 

The decline in trading volume further suggests that some investors are taking a wait-and-see approach. The coming days will be crucial in determining whether the initial enthusiasm for Ethereum ETFs translates into sustained investor confidence.

On the Flipside

• Excluding Grayscale ETHE’s outflow, likely due to the 2.5% fee, the overall picture would have been positive with a net inflow of roughly $193.7 million.
• Spot Ethereum ETFs are a new product in the US market. Their long-term performance and impact on investor sentiment remain to be seen.

Why This Matters

Despite a strong start, with some new funds like FETH exceeding expectations, the initial euphoria surrounding Ethereum ETFs fizzled on day two, marked by a net outflow and declining trading volume. Investors’ wait-and-see approach highlights the need for continued positive performance from the ETFs to build long-term confidence in this new avenue for Ethereum exposure.

Ether ETFs launched with strong trading volume, yet Ethereum’s price remained flat. For analysts’ predictions on Ether ETFs, read more here:
Here’s How Ether ETFs Performed on Their First Day of Trading

Bitcoin ETFs are losing popularity to new Ether ETFs as investors shift funds from Bitcoin to Ether. Learn more about this trend and the future of crypto ETFs here:
Bitcoin ETFs See Outflows as Ether ETFs Takes Center Stage