Spot Ethereum ETFs Experience Underwhelming Debut After SEC Approval
Following its unexpected approval by the United States Securities and Exchange Commission (SEC), the spot Ethereum ETFs (exchange-traded funds) became one of the most important narratives in the cryptocurrency space. However, the crypto investment products seem not to be living up to the hype after an underwhelming trading debut in the past week.
Grayscale Sees Heavy Outflows in Spot Ethereum ETFs
On Friday, 26th of July, the recently-launched spot Ethereum ETFs posted another day of significant outflows, marking the third consecutive day of withdrawals from these products. The exchange-traded products, which launched on Tuesday, July 23, recorded a net outflow of roughly $341 in the opening week.
– Data from SoSoValue showed a strong start with a net inflow of $106.8 million on day one
– Followed by significant outflows of $133 million, $152 million, and $162 million on subsequent days
– Grayscale’s ETHE fund recorded a single-day outflow of over $356 million
Grayscale’s ETH Trust exchange-traded fund ETHE has been a major factor in the capital outflow from the spot Ethereum ETFs. The fund saw a single-day outflow of over $356 million on Friday. Since the launch of the spot Ethereum ETFs, the Grayscale product has seen a cumulative net inflow of $1.51 billion.
Price of Ethereum Struggles Despite ETF Launch
Despite the launch of the Ether ETFs, the price of Ethereum has faced challenges. CoinGecko data shows a decline of over 7% in the past week, with Ethereum currently priced at around $3,248, reflecting a 1.1% dip in the past day.
New Money Inflow Has Limited Impact on ETH
CryptoQuant’s latest report indicates that fresh capital inflows, such as those from ETFs, have a less significant impact on Ethereum compared to Bitcoin. The “realized capitalization multiplier” metric shows that Bitcoin’s market cap can increase by $5 for every dollar invested, while Ethereum’s market cap only rises by $1.3 for each dollar invested.
– Bitcoin’s market cap increases by $5 for every dollar invested, while Ethereum’s only rises by $1.3
– This suggests that ETH’s multiplier effect has been significantly lower than Bitcoin’s in 2024
This data suggests that the impact of new money flowing into Ethereum has been less pronounced compared to Bitcoin in the current year.
Closing Thoughts
Following the approval of spot Ethereum ETFs by the SEC, the crypto world anticipated significant growth. However, the underwhelming debut of these products in the market indicates a different reality. Despite initial hype, outflows and price struggles have characterized Ethereum’s recent performance. The impact of new money inflows on Ethereum has been notably lower than on Bitcoin, emphasizing the unique challenges faced by the “king of altcoins” in the current landscape.
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