Ethereum News – Spot Ether ETFs Struggle with $113 Million in Net Outflows on Second Trading Day
Ethereum News – United States-based spot Ether exchange-traded funds (ETFs) experienced net outflows of $113.3 million on their second trading day, largely due to substantial selling from Grayscale’s Ethereum Trust.
Day Two Performance: Mixed Results for New ETFs
On their second day of trading, seven of the eight newly launched spot Ether ETFs posted net inflows. The Fidelity Ethereum Fund (FETH) and the Bitwise Ethereum ETF (BITW) led the pack, with net inflows of $74.5 million and $29.6 million, respectively. However, BlackRock’s iShares Ethereum Trust (ETHA), which had seen the strongest inflows on July 23, attracted only $17.4 million on July 24.
Grayscale’s Ethereum Trust Conversion and Its Impact
The ETFs were significantly impacted by another heavy day of selling from the recently converted Grayscale Ethereum Trust (ETHE), which recorded $326.9 million in outflows. Launched in 2017, ETHE allowed institutional investors to purchase ETH but imposed a six-month lock-up period on investments. Since its conversion to a spot Ether fund on July 22, investors have been able to sell their ETH more easily, leading to $811 million in outflows over two days. This accounts for over 9% of the fund’s holdings being sold off by existing investors.
Comparison with Spot Bitcoin ETFs
This performance is not unprecedented in the world of crypto ETFs. Spot Bitcoin ETFs also posted cumulative net outflows for six out of their first 10 trading days, with many attributing the outflows to Grayscale Bitcoin Trust ETF sales.
Current Ether Market Conditions
As of the time of publication, ETH is trading at $3,172, down 6.8% in the last 24 hours and 7.4% over the week, according to TradingView data. This decline in Ether’s price is part of a broader sell-off in the equities market, with the S&P 500 closing down 2.3% on July 24. Notably, ETH fell more sharply than Bitcoin, which declined only 2.6%. This aligns with Kaiko analyst Will Cai’s prediction that ETH’s price would be particularly “sensitive” to inflows following the launch of the ETFs.
First Day Inflows and Outflows
On its first day of trading as a spot Ether ETF, Grayscale’s ETHE saw $484.4 million in outflows. However, strong inflows across the other eight products resulted in cumulative net inflows of $106.6 million.
Frequently Asked Questions (FAQ) about Recent Spot Ether ETFs Performance
What caused the $113.3 million net outflows in spot Ether ETFs on their second trading day?
The net outflows were primarily due to heavy selling from Grayscale’s Ethereum Trust (ETHE), which experienced substantial outflows totaling $326.9 million. This large sell-off impacted the overall performance of the newly launched Ether ETFs.
Which spot Ether ETFs had the highest net inflows on their second trading day?
The Fidelity Ethereum Fund (FETH) and the Bitwise Ethereum ETF (BITW) led the new ETFs with the highest net inflows. FETH recorded $74.5 million in inflows, while BITW saw $29.6 million.
What impact did Grayscale’s Ethereum Trust (ETHE) have on the new Ether ETFs?
Grayscale’s ETHE significantly affected the performance of the new Ether ETFs. After converting to a spot Ether fund on July 22, ETHE experienced $811 million in outflows over two days. This sell-off led to a negative impact on the performance of the newly launched ETFs.
How does the recent performance of Ether ETFs compare to spot Bitcoin ETFs?
The recent performance of Ether ETFs is similar to that of spot Bitcoin ETFs, which also faced cumulative net outflows for six out of their first ten trading days. Both types of ETFs experienced significant outflows due to sales from established trust funds.
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