Ethereum exchange-traded funds (ETFs) have recorded their first green day after a four-day losing streak. A week after their launch, massive inflows, led by Grayscale’s Ethereum Trust (ETHE), have outpaced the stellar start of the ether-based investment product.
Ethereum ETFs Outperform Outflows
The approval of Ethereum (ETH) spot ETFs has been surrounded by debate over demand and potential post-launch performance. Many experts have predicted that the investment products will not achieve the same numbers as their Bitcoin-based counterparts, citing a lack of a “clear narrative,” media interest, and demand.
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Some industry figures, including Bitwise CEO Catherine Dowling and American entrepreneur Anthony Pompliano, have suggested that Ethereum ETFs will only achieve around 20%-30% of BTC funds. The investment product has had a great start, meeting experts’ expectations on its first day. The funds recorded $1.05 billion in volume, around 24% of what Bitcoin ETFs achieved on launch day, and $107.8 million in inflows. This feat was achieved regardless of the $484 million net outflow recorded by ETHE.
However, Ethereum ETFs ended in the red after the second day of trading. The funds saw volume drop 5% on Wednesday and a negative net inflow of $113.3 million. Despite the outflows, some analysts suggested that the performance exceeded expectations, as volume did not drop significantly after the first day’s frenzy.
According to Farside Investor data, outflows from ETH ETFs exceeded positive net inflows in the following days. By July 29, the average daily outflows from investment products were $137.8 million, and the total outflows were $440.1 million across all ETH ETFs.
First Green Day Ends Negative Net Inflow Streak
The four-day negative streak ended on July 30, after Ethereum exchange-traded funds (ETFs) recorded their first green day since launch. Led by $118 million inflows from Blackrock’s iShares Ethereum Trust (ETHA), the funds saw a net positive inflow of $33.7 million on Tuesday.
Ethereum ETF's net flows on July 30. Source: Farside Investors
The ETHE fund recorded a net negative inflow of $120 million, the lowest since the spot ETF launched. Additionally, the fund saw a 75% drop in outflows from its first-day negative performance of $480 million. This drop suggests that Grayscale’s bleeding, which stood at around $1.84 billion on July 30, is slowing, and the fund could continue its positive streak.
Meanwhile, ETHA has crowned itself the best performing Ethereum coin after recovering from a disappointing second day. A week after its launch, the fund has generated a total positive net inflow of $618.2 million.
As Head of ETF Shop Nate Geraci advertiserETHA has already made it into the top 15 inflows of all ETFs launched this year. “Top 15 out of ~330 new ETFs. Top 4 inflows of all Bitcoin spot ETFs, by the way,” the post reads.
Mads Eberhardt, a senior analyst at Steno Research, confirmed that Blackrock’s ETHA and Fidelity’s FETH saw a third of the inflows of their Bitcoin counterparts.
Eberhardt Confirmed This performance has been achieved despite several drawbacks against Bitcoin ETFs:
This happened despite generally lower interest in Ethereum ETFs, a less than optimal month for launch, full market awareness that Grayscale’s Ethereum ETF would be depleted in the near term, and the fact that Ethereum had half the market cap of Bitcoin when the ETF launched with worse liquidity.
Ultimately, the senior analyst believes that outflows from Ethereum ETFs will subside by the end of this week, and “when that happens, it will only go up from there.”
ETH is trading at $3,330 in the five-day chart. Source: ETHUSDT on TradingView
Featured image from Unsplash.com, chart from TradingView.com