Just Three Days In, Spot ETH ETF Faces $179 Million Outflow

Just Three Days In, Spot ETH ETF Faces $179 Million Outflow

Three days after the launch of the Ethereum spot ETF, the total outflow reached approximately $179 million (about Rp2.9 trillion) on July 25, 2024.
Image: ETH ETF outflow. Source: Farside.

Major Outflows for Grayscale's ETHE

The Grayscale Ethereum ETF (ETHE) saw a significant drop, with a net outflow of $346 million on the third day of trading. This loss caused the total assets managed by ETHE to decrease substantially from over $9 billion to $7.4 billion.

Other Ethereum ETFs Perform Better

Not all Ethereum ETFs faced the same fate. BlackRock’s iShares Ethereum Trust (ETHA) attracted $71 million in inflows on the third day of trading, indicating strong investor interest in this product.

Other ETFs, including Fidelity’s Ethereum Fund (FETH), Bitwise’s Ethereum ETF (ETHW), VanEck’s Ethereum ETF (ETHV), and Invesco/Galaxy’s Ethereum ETF (QETH), also reported inflows, reflecting varied investor interest across the Ethereum ETF spectrum.

Spot ETH ETF Triggers "Sell the News" in Crypto Market

On the other hand, the price of ETH has been declining, dropping more than 10% since the ETF's approval. As of this writing, ETH is trading at $3,251.

This decline indicates strong selling pressure, similar to the pattern seen during the launch of the Bitcoin ETF, where Bitcoin's price also corrected after an initial positive phase, signifying a "sell the news" trend in the crypto market.

Impact of Large Investors

The activity of large investors, or whales, has also played a significant role in the price drop. Data shows that Grayscale recently moved 140,044 ETH to Coinbase Prime, valued at nearly $500 million.

This move affected the market price, suggesting that whales might be using the liquidity available in the Ethereum ETF market to sell their ETH, exacerbating existing selling pressure.
Meanwhile, the decline in ETH price was capitalized on by BlackRock's iShares Ethereum Trust, which added 76,669 ETH to its portfolio, valued at around $262 million.

Future Outlook

Given the current market conditions, the future of Ethereum ETFs remains a focal point. Investors need to brace for volatility and assess whether this price drop is a temporary correction or an indication of a deeper trend in the crypto market.

Conclusion

The launch of Ethereum spot ETFs has seen mixed reactions in the market. While Grayscale's ETHE faced significant outflows, other ETFs like BlackRock’s iShares Ethereum Trust attracted strong investor interest. The broader crypto market experienced a "sell the news" effect, with ETH prices dropping over 10%. Large investor activities further influenced the market, adding to the selling pressure. As the future of Ethereum ETFs remains uncertain, investors should prepare for continued volatility and closely monitor market trends to determine if recent declines are temporary corrections or indicative of a deeper trend.

Read too : 8 Ethereum Spot ETFs to be Traded in the US

*Disclaimer:
This content aims to enrich reader information. Always conduct independent research and use disposable income before investing. All buying, selling, and crypto asset investment activities are the reader's responsibility.