Ethereum Futures ETFs See Low Initial Trading Volumes
Industry experts have noted that the nine Ethereum futures ETFs launched on October 2 have experienced low initial trading volumes. Bloomberg ETF analyst Eric Balchunas stated that the trading volume for the Ether Futures ETFs as a group was “pretty meh,” with less than $2 million traded by midday. However, he mentioned that this level of volume is typical for a new ETF. In comparison, the first Bitcoin futures ETF, BITO, saw $200 million in trading volume within its first 15 minutes. The launch of Ethereum futures ETFs has not had a significant impact on ETH prices, which have fallen by 3.4% to $1,667.
Ethereum Futures ETFs Not Bullish
MV Capital CIO Tom Dunleavy expressed confusion over the bullish sentiment surrounding Ethereum futures ETFs. He emphasized that spot buying is what truly matters and can be facilitated by spot ETFs. These funds require a set amount of purchasing ahead of time, regardless of market demand. Dunleavy highlighted that if ten or twelve spot ETFs are approved for BTC or ETH, it could result in $500 million to $1 billion in spot buying, which would have a significant impact on price action. Therefore, futures ETFs do not fulfill this latent demand and are not as meaningful.
Ethereum Price Reaction
The launch of the first futures ETFs for Ethereum did not boost ETH prices. This is because futures contracts do not directly invest in the asset but instead use futures contracts from the Chicago Mercantile Exchange. As a result, they do not affect spot ETH prices. In response to the launch of Ethereum futures ETFs, ETH has experienced a decline of 3.4% and currently sits at $1,667. The price is expected to return to support at $1,650 following a previous pump to $1,735.
Hot Take: Ethereum Futures ETFs Face Low Initial Trading Volumes
The initial trading volumes for the nine Ethereum futures ETFs launched on October 2 have been lackluster. Despite the hype surrounding these ETFs, they have failed to generate significant trading activity, with less than $2 million traded by midday. This is in stark contrast to the first Bitcoin futures ETF, which saw $200 million in volume within its first 15 minutes. Additionally, experts argue that futures ETFs do not fulfill the spot buying demand that could have a meaningful impact on price action. As a result, the launch of Ethereum futures ETFs has not had a bullish effect on ETH prices.
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