Spot Ether ETFs See Strong Start on Debut But Falls Short of Bitcoin ETFs, Says Analyst

Spot Ether ETFs See Strong Start in Debut, But Lag Behind Bitcoin ETFs, Says Analyst

Spot Ethereum exchange-traded funds (ETFs) saw net inflows of over $100 million on their first day of trading on July 23. While this strong start is noteworthy, it lags behind the impressive outflows of Bitcoin ETFs in January, and analysts suggest that Ether ETFs may face more difficulty gaining traction among traditional investors.

Initial inflows for Ether ETFs ranged from 10% to 20% of the amount raised by Bitcoin ETFs on the first day. This result is in line with expectations given Bitcoin’s larger market capitalization but raises concerns about Ether’s appeal to traditional investors. “The Bitcoin Spot ETF has set new standards as the most successful ETF launch in financial history,” said Adrian Fritz, head of research at 21Shares, a major issuer of both BTC and ETH ETFs.

Fritz noted that Bitcoin’s narrative as an emerging store of value is simpler and more broadly understood, while Ethereum’s value proposition is more complex and requires greater educational efforts to attract investors. Despite these challenges, Fritz remains optimistic about Ethereum’s potential to attract significant institutional interest.

Strong initial inflows into Ether ETFs helped ease market concerns about their launch. The Ethereum Volmex Implied Volatility (EVIV) index, which measures ETH’s 30-day expected volatility, fell 4 points to around 65 in the 24 hours following the ETFs’ listing, according to CoinMarketCap. Cole Kennelly, founder of Volmex Finance, explained that the market priced in uncertainty before the ETFs launched, but the subsequent “volatility collapse” suggested that ETF inflows could stabilize ETH spot markets.

Among new spot Ether ETFs, BlackRock’s iShares Ethereum Trust ETF (ETHA), Bitwise Ethereum ETF (ETHW) and Fidelity Ethereum Fund (FETH) led in terms of inflows, attracting around $266 million, $204 million and $71 million respectively, according to Bloomberg data.

However, these inflows were partially offset by significant outflows from Grayscale’s legacy fund ETHE, which saw outflows of approximately $484 million. Launched in 2017 under a different fund structure, ETHE charges a 2.5% management fee, significantly higher than newer spot ETH funds. In total, the eight new spot Ether ETFs that listed on July 23 attracted net inflows of approximately $590 million.