The much-anticipated launch of several Ethereum-based spot exchange-traded funds (ETFs) has failed to trigger a significant Ethereum (ETH) price rally. Despite considerable trading volumes and large inflows into the “newborn” ETFs on their first day, Grayscale’s outflows were too massive (once again) to propel Ether’s price higher.
Ethereum ETFs start strong, but in shades of gray…
Eric Balchunas, senior ETF analyst at Bloomberg, shared via He also noted that “The difference between ETHE and The Newborn Eight is a healthy +$625 million.”
However, despite these healthy volumes, Ethereum’s price only increased by a marginal 1% yesterday. At press time, ETH was at $3,437, down 0.4% over the past 24 hours. In contrast, Bitcoin (BTC) price drop by 1.6%, and other altcoins also faced downward pressure, falling between 4% and 10%.
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James Seyffart, another ETF expert at Bloomberg, commented the first day of inflows, “The first full day of inflows into ETHness holdings has arrived. Ethereum ETFs have raised $107 million. Black stoneBitwise’s ETHA led with $266.5 million, followed by Bitwise’s ETHW with $204 million. Very solid first day.”
Despite these positive flows, the day was not without its challenges. The Grayscale Ethereum Trust (ETHE), which transitioned from a traditional trust to a spot ETF, saw substantial outflows worth $484.9 million, representing about 5% of the fund’s value. Commenting on the move, Eric Balchunas said: “Damn. That’s a lot. Like 5% of the fund. I’m not sure the Eight newbies can offset outflows of that magnitude. On the other hand, it might be best to get this over with quickly, like ripping off a band-aid.”
The introduction of these ETFs is part of a broader trend following the launch of Similar Bitcoin ETFs in January, which also experienced a combination of significant inflows and outflows from the Grayscale Bitcoin Trust (GBTC). The Ethereum Mini Trust, another Grayscale product, however, reported $15.2 million in new inflows.
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Other notable Ethereum ETFs, such as Franklin Templeton’s (EZET) Core Ethereum ETF (CETH) and 21Shares’ Core Ethereum ETF (CETH), saw inflows of $13.2 million and $7.4 million, respectively, indicating varying levels of investor interest in different funds.
Overall, the first day of trading for these Ethereum ETFs brought significant volumes and complex fund flows, but did not translate into a significant price rally for Ethereum. As with Bitcoin, Grayscale’s outflows for Ethereum appear to need to be ironed out before the ETFs can have a significant impact on price.
At the time of writing, ETH was trading at $3,442.
Featured image created with DALL·E, chart from TradingView.com