Increase in Ethereum ETFs Trading, but Limited Impact on Crypto Markets
Last week, the U.S. SEC approved the trading of six futures-based Ethereum ETFs. However, these ETFs did not have a significant impact on trading volumes or the cryptocurrency market as a whole. According to Kaiko, VanEck’s EFUT and ProShares EETH, the two ETFs with the highest trade volume, had an average daily trading volume of only $500,000 during their first week. In comparison, the first Bitcoin futures ETF accumulated over $1 billion in trade volume on its debut day. The underperformance of ETH is attributed to the current bear market, where traders tend to favor BTC. ETH spot trade volume has also remained flat over the past two months. Despite this, some experts believe that true transformation may still be on the horizon.
Futures-Based Ethereum ETFs Fail to Make an Impact
Although six futures-based Ethereum ETFs recently started trading in the U.S., they did not generate significant trading volumes or provide a notable boost to the cryptocurrency markets. The two ETFs with the highest trade volume, VanEck’s EFUT and ProShares EETH, had an average daily trading volume of only $500,000 during their first week of trading. In contrast, the first Bitcoin futures ETF amassed over $1 billion in trade volume on its initial trading day. The lackluster performance of these ETH ETFs is attributed to the influence of the current bear market, where traders typically turn to BTC. As a result, ETH spot trade volume has remained relatively flat over the past two months.
Potential for Transformation Despite Underwhelming ETH ETF Response
Despite the disappointing performance of futures-based Ethereum ETFs in terms of trading volumes, there are still indications that significant changes could be on the horizon. Tom Dunleavy, Chief Investment Officer of MV Capital, suggests that true transformation may still be possible. He highlights the importance of spot buying, which futures ETFs do not facilitate. While the current bear market has impacted ETH’s performance, there is optimism that Ethereum’s non-security status and potential for growth will eventually attract more investors.
Hot Take: Ethereum ETFs Underwhelm, but Transformation May Still Be on the Horizon
The launch of six futures-based Ethereum ETFs in the U.S. did not have a major impact on trading volumes or the crypto market. Despite this underwhelming response, there are signs that true transformation could still occur. The low trading volumes of these ETFs can be attributed to the current bear market and the preference for Bitcoin among traders. However, experts believe that Ethereum’s non-security status and its potential for growth will eventually attract more investors. While the initial results may be disappointing, it is important to keep an eye on developments in the Ethereum ETF space as they could play a significant role in shaping the future of cryptocurrency trading.
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