The launch of spot Ethereum ETFs was met with anticipation, but the immediate results have been quite underwhelming. Comparisons have been drawn to the spot Bitcoin ETF launch earlier in the year, where the numbers tell a different story.
On the first day of trading, the nine spot Ethereum ETFs saw solid net flows of over $106 million, a promising start. However, subsequent days painted a different picture, with daily outflows growing steadily. Grayscale’s ETHE saw significant withdrawals, losing millions in just a few days. Despite some ETFs managing to alleviate the pain, the overall trend is concerning.
The contrast between the spot Ethereum ETFs and their Bitcoin counterparts is stark. The Bitcoin ETFs saw inflows of over $650 million on the launch day, with total net flows reaching close to $1.260 billion in just four days. In comparison, the Ethereum ETFs experienced outflows amounting to $341.8 million in the same period.
One would expect that with over $1.250 billion entering the Bitcoin ecosystem through the ETFs, the price of bitcoin would surge. However, the reality was different. Bitcoin initially rose from $45,000 to $49,000 but then dropped to $41,300 by the fourth day. In contrast, Ethereum’s price saw a dip from $3,500 to $3,000 but has since rebounded to around $3,300. Despite the outflows, ether’s price is down only 6.5%, while bitcoin plummeted by 16%.
The disparity in market sentiment and demand between Bitcoin and Ethereum is evident in the performance of their respective ETFs. While Bitcoin saw immense demand and inflows, the price did not reflect this enthusiasm. Conversely, Ethereum faced withdrawals and outflows but managed to maintain a more stable price compared to Bitcoin.
The slow start of the spot Ethereum ETFs raises questions about investor sentiment towards the second-largest cryptocurrency. Despite the initial hurdles, it remains to be seen how the market will react in the coming days and weeks. The performance of the ETFs and the underlying assets will continue to be closely monitored to gauge the long-term impact on the crypto market.
The launch of spot Ethereum ETFs has not been as successful as initially anticipated, especially when compared to the performance of spot Bitcoin ETFs. The disparity in net flows, price performance, and market sentiment highlights the unique challenges and opportunities facing different cryptocurrencies in the evolving landscape of digital assets. Investors and market analysts will be closely watching how Ethereum ETFs continue to perform in the coming weeks to understand the broader implications for the crypto market as a whole.