The Launch of Ethereum Futures ETFs Fails to Generate Significant Investment
The recent launch of nine Ethereum futures exchange-traded funds (ETFs) has not resulted in substantial investment. These ETF products, introduced on October 2, are designed to track futures contracts linked to the value of Ethereum’s native currency, Ether (ETH). Out of the nine funds, five exclusively hold Ether futures, while the remaining four track a combination of Bitcoin and ETH futures contracts. However, senior Bloomberg ETF analyst Eric Balchunas described the trading volume on the first day as “pretty meh.” The total trading volume for all nine ETFs was less than $2 million, with Valkyrie’s BTF being the most popular option at $882,000 worth of volume.
Comparing Ether ETFs with ProShares Bitcoin Strategy ETF
The trading volume for the Ether ETFs on their first day was significantly lower compared to the ProShares Bitcoin Strategy ETF (BITO), which recorded over $1 billion in trading volume during its debut in October 2021. Balchunas acknowledged that although the Ether ETFs had relatively high volume for a traditional finance ETF launch, investors generally prefer spot ETF products rather than futures. He also mentioned that launching all the products on the same day was a strategic move by the SEC to prevent any one fund from dominating the market.
Volatility Shares Withdraws Plans for Ether Futures ETF
While various US firms competed for dominance in the emerging Ether futures market, Volatility Shares decided to cancel its listing plans for a similar product. The firm stated that it did not see a favorable opportunity at present. This withdrawal adds to the mixed response and limited investment seen in the initial launch of Ethereum futures ETFs.
Hot Take: Limited Investor Interest in Ethereum Futures ETFs
The launch of nine Ethereum futures ETFs has failed to generate significant investment, with the total trading volume on the first day being less than $2 million. Despite being the most popular option, the Ether and Bitcoin combination ETF by Valkyrie had a trading volume of $882,000. This pales in comparison to the ProShares Bitcoin Strategy ETF, which recorded over $1 billion in trading volume on its debut day. Analyst Eric Balchunas noted that although the trading volume was relatively high for a traditional finance ETF launch, investors generally prefer spot ETF products rather than futures. The withdrawal of Volatility Shares from listing an Ether futures ETF further reflects the mixed response to these products.
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