Nine Spot Ethereum ETFs Record $98.29M in Net Outflows, Negative Flow Streak Continues

The U.S. market for spot Ethereum exchange-traded funds (ETFs) witnessed a substantial outflow of $98.3 million. This marked the fourth consecutive day of negative flows for these financial products.

The consistent outflows signal reduced investor interest, possibly driven by market conditions or broader economic factors influencing digital asset investments.

Ethereum ETF Flows

Most of these outflows came from the Grayscale Ethereum Trust (ETHE), which recorded $210.04 million in net outflows. ETHE has been under pressure since its debut last Tuesday, recording hundreds of millions of dollars in outflows daily.

This consistent withdrawal trend from ETHE highlights a significant shift in investor confidence, prompting a reevaluation of its impact on the broader Ethereum ETF market.

However, not all Ethereum ETFs experienced outflows; BlackRock's ETHA led in net inflows, attracting $58.17 million. Fidelity's FETH trailed close, with $24.82 million in new investments. VanEck's ETHV and Bitwise's ETHW come behind FETH with $10.91 million and $10.45 million, respectively.

Meanwhile, smaller funds also saw some positive movement. The Grayscale Ethereum Mini Trust saw net inflows of $4.9 million, while $2.52 million went to Franklin's EZET.

However, ETFs managed by Invesco and 21Shares did not see any activity, remaining static for the day. The contrasting movements with these funds reflect a limited investor interest and confidence level in them.

Besides these funds, trading volumes also reflected this mixed sentiment. On Monday, the total trading volume for spot Ethereum ETFs was $773.01 million. This figure represents a nearly 18% decline from $933.86 million on Friday and a 20% drop from $955.85 million on Thursday.

This drop in trading activity indicates a more cautious investor approach in the face of recent market volatility.

Bitcoin ETF Flows

In a contrasting development, U.S. spot Bitcoin ETFs saw net inflows of $124.13 million on Monday. These substantial inflows show stronger investor confidence in Bitcoin over Ethereum for the day.

Meanwhile, BlackRock's IBIT was particularly noteworthy, with net inflows of $205.62 million, standing as the only Bitcoin ETF to see positive flows during the period.

On the other hand, the Grayscale Bitcoin Trust (GBTC) saw $54.29 million in net outflows. Fidelity's FBTC and Bitwise's BITB also recorded significant outflows of $5.89 million and $21.3 million, respectively.

Regarding trading volumes, there was a higher value of $2.68 billion on Monday than on Friday and Thursday. Trading volumes for Thursday and Friday held at $2.04 billion and $1.51 billion, respectively.

Undoubtedly, there has been a more optimistic trading environment for Bitcoin ETFs than those for Ethereum, as reflected in the higher trading volume. However, there is a possibility for a shift in sentiment as trading activity continues.

Steno Research's senior analyst, Mads Eberhardt, thinks Grayscales ETHE outflows will slow down this week. He compared ETH ETFs to the spot BTC ETFs, noting that outflows from Bitcoin ETFs slowed after the eleventh day of trading.

The Grayscale Bitcoin ETF outflow subsided significantly following the eleventh trading session.

Since the Grayscale Ethereum ETF has experienced a much higher outflow relative to AUM, we believe that peak outflow will occur sometime this week.

- Mads Eberhardt (@MadsEberhardt) July 29, 2024

Also, the chief investment officer at BlackRock, Samara Cohen, predicted a remarkable surge for Ethereum ETFs by the end of 2024. She believes that cryptocurrency ETFs will be incorporated into model portfolios by the end of the year.

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