Ethereum ETFs Are Not Like Bitcoin ETFs (So Far)

A few months after the initial green light from the SEC, Ethereum ETFs officially went live last Tuesday.

However, the immediate results have been quite underwhelming and one can’t help but compare them to the one-off launch of the Bitcoin ETF in January this year.

ETH vs. ETFs BTC ETF

CryptoPotato reported earlier this week that the nine Ethereum ETFs had a solid first day, gathering over $106 million in net flows. As expected, the converted grayscale fund (ETHE) saw substantial withdrawals of nearly $500 million, but flows into the rest (especially ETHA and ETHW) managed to ease the pain.

However, the next three days were quite different as the trend quickly changed. Instead of general admissions, the daily numbers turned red, with $133.3 million withdrawn on July 24, $152.4 million withdrawn on July 25, and $162.7 million withdrawn on July 26. july

It’s a worrying trend, as departures are actually growing. Grayscale’s ETHE lost $326.9 million, $346.2 million, and $356.3 million, respectively, in those three days.

However, demand for the remaining products, even for BlackRock’s ETHA and Fidelity’s FETH, has been declining and they have not been able to offset the mass withdrawals of ETHE. As such, the numbers after the first four days of trading show $341.8 million taken out of Ethereum ETFs.

There is a stark contrast compared to the first four days of spot Bitcoin ETFs. The release date recorded more than $650 million in admissions, the second $203 million and the fourth $453.8 million. Only minor departures were seen on the third day ($52.7 million). Total net flows were close to $1.26 billion in just four days, highlighting the huge difference compared to Ethereum ETFs.

What about price actions?

While the difference in demand for the two largest cryptocurrencies is more than evident (for now, at least), the price performance of the underlying assets during the first trading days after the launch of their respective ETFs has been unexpected.

With over $1.25 billion entering the BTC ecosystem, one would imagine that the price of bitcoin would be on a tear. But, they will be wrong. The cryptocurrency soared from $45,000 to $49,000 after the ETFs hit the markets on January 11, but dipped to $41,300 on the fourth day.

Bitcoin/Price/Chart 07/27/2024. Source: TradingView

ETH, on the other hand, started with a price drop from $3,500 to $3,000, which was somewhat expected given the exits, but bounced back and is currently near $3,300. As such, ether is only down 6.5% now, despite significant exits, while BTC plummeted 16% despite ETFs taking a massive hit early on.

Ethereum/Price/Chart 07/27/2024. Source: TradingView SPECIAL OFFER (Sponsored) Binance Free $600 (Excludes CryptoPotato): Use this link to register a new account and receive an exclusive welcome offer of $600 to Binance (full details).

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