Grayscale Ethereum Trust (ETHE) Records First Zero Outflow Day Amid Surge in Onchain Activity

Grayscale Ethereum Trust Hits Milestone: First Zero Outflow Day Sparks Bullish Sentiment

Grayscale Ethereum Trust (ETHE) has achieved a milestone by recording its first day of zero outflows since its inception, marking the end of a consistent stream of daily outflows. This development coincides with a significant increase in onchain activity on Ethereum and its associated layer-2 networks.

On August 12, data from Farside revealed that United States-based spot Ether (ETH) exchange-traded fund (ETF) flows turned positive for the fifth time since their launch on July 23. This positive shift was largely driven by ETHE’s first day without outflows, which stands out after the fund had seen nearly $2.3 billion worth of Ether withdrawn since its launch.

Before ETHE’s conversion, the trust held approximately $9 billion in ETH, indicating that it has lost over 25% of its total holdings within just two and a half weeks of the ETFs going live. By comparison, the Grayscale Bitcoin Trust (GBTC) took nearly four months to experience its first day without outflows.

This zero-outflow day for ETHE comes amidst a sharp increase in activity on Ethereum, particularly across decentralized exchanges (DEXs) and its layer-2 networks. Data from DefiLlama shows that while trading volumes on Solana-based DEXs dropped by 10% in the last 24 hours, Ethereum and Base saw trading volumes rise by 12% and 11%, respectively, during the same period. Additionally, activity on Ethereum’s layer-2 networks has surged, with Uniswap—an Ethereum-based DEX—setting a record for new monthly L2 addresses in July. According to Dune Analytics, Uniswap recorded 8.65 million new addresses across layer-2 networks in July, nearly double the 4.93 million added in June.

Leon Waidmann highlighted in an August 9 post on X that Base and Arbitrum boasted 2.64 million and 1.37 million weekly active users, respectively. Moreover, on August 12, a total of 73 Ethereum layer-2 networks registered a combined 298 transactions per second (TPS), just shy of the all-time high of 322 TPS recorded on July 18, according to L2Beat data.

The total value locked (TVL) across all Ethereum layer-2 networks now stands at $37.7 billion, while Ethereum’s mainnet holds $85 billion in TVL.

Analysts Predict Bullish Momentum for Ether

Several analysts have identified the decreasing outflows from ETHE as a key bullish indicator for Ether’s price in the upcoming months. They suggest that ETH may follow a trajectory similar to Bitcoin (BTC) after its spot ETF approvals, which were also accompanied by significant outflows from GBTC.

As Ethereum’s onchain activity continues to grow, particularly in its layer-2 networks, and with outflows from ETHE slowing down, the market may be setting the stage for a potential bullish run in Ether’s price.

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