Ethereum’s price performance has been a major concern for investors over the past few weeks, as it has continued to trend downward. What makes the coin’s struggles even more worrying is that it has shown no signs of relief despite the recent launch of Ethereum-specific exchange-traded funds (ETFs) in the United States.
However, it appears that the disappointing performance of Ethereum ETFs — so far — may have contributed to Ethereum’s price woes in recent weeks. Specifically, Grayscale has seen a significant capital outflow from its Ethereum fund, the Grayscale Ethereum Trust (ETHE).
Grayscale Ethereum Trust Reaches $2.1 Billion in Outflows
After its first full week of trading, the U.S. Ethereum ETF market has seen significant inflows from cryptocurrency products. According to data from SoSoValue, a total of $169.35 million has flowed into Ethereum ETFs in the past week.
While this still represents a significant amount of outflow from Ethereum spot funds, it is more than 50% less than the outflow we saw in the first week. In the first week, the ETH ETF market saw a net outflow of over $341 million.
The main fund responsible for this level of capital outflow is the Grayscale Ethereum Trust, which has seen over $2.1 billion withdrawn in the past two weeks. ETHE saw a net outflow of over $1.5 billion in the week it launched.
Grayscale Ethereum Trust (ETHE) | Source: SoSoValue
On Friday, August 2, the Grayscale Ethereum Trust saw a total outflow of $61.43 million, according to data from SoSoValue. This latest move by the fund brings ETHE’s total net asset value to just under $6 billion.
Similar to when the Bitcoin ETF was launched, Grayscale’s ETHE holders appear to be redeeming their shares from the fund, having failed to do so for years. As with Bitcoin, the massive outflows appear to be putting a fair amount of downward pressure on the price of Ethereum.
Ethereum Price Overview
At the time of writing, Ethereum is trading at around $2,907, reflecting a 2.2% drop in value over the past 24 hours. According to CoinGecko data, the cryptocurrency has fallen by more than 10% over the past seven days.
This seven-day performance underscores the struggles that ETH has faced in the past few weeks. Data from CoinGecko shows that Ethereum’s price has fallen by about 8% in the past month.
However, Ether has maintained its position as the second-largest cryptocurrency in the sector, with a market cap of over $347 billion.
The Ethereum price on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image by iStock, chart by TradingView
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