ETF and futures push down Ethereum (ETH)

According to the latest crypto news, since their launch, Ethereum ETFs have recorded numerous and significant outflows compared to few reduced inflows of capital. Unlike Bitcoin ETFs which have brought greater wealth to the cryptocurrency, here the result of the first weeks of trading does not convince investors.

At the same time, Ethereum futures volumes on the “Chicago Mercantile Exchange” (CME) also face a reduction in trading with bear data in August. 

Let’s take a closer look at what is happening to investment products based on ether: all the details below.

The picture of spot Ethereum ETFs: outflows reign among the latest crypto news

Since they were launched on July 23, the spot Ethereum ETFs have disappointed investors’ expectations with unconvincing numbers. Data in hand, these regulated investment instruments have generated a net outflow of over 560 million dollars since their debut.

According to what is shown by the SoSoValue platform, the tendency towards the distribution of subjects who participated in the exchanges appears evident. After an initial inflow of 106 million dollars, there were 21 days characterized by outflow compared to just 8 positive days.

The last two sessions on September 3 and 4, with outflows of 47 and 37 million dollars respectively, contribute to worsening the current picture. All sales come from the provider Grayscale, which to date has liquidated 2.65 billion dollars in Ethereum positions in its ETF.

Blackrock, Fidelity, Bitwise e lo stesso Grayscale ma nel fondo “Mini-Trust” are instead those who have purchased the most, adding a total of 1.95 billion dollars. The assets currently held by the various Fund Manager amount to 6.73 billion dollars.

In parallel with the launch of ETFs; Ethereum lost over 22% of its value on the market in August, recording the largest sell-off since June 2022. Regarding the failure of the US speculative products based on ether, DBS Treasury intervened in a detailed post, stating that:

“The launch timing of the US spot Ether ETFs on July 23 turned out to be far from ideal, coinciding with a sell-off in tech stocks. Ether’s high beta (~ 2.7) implies significant losses during risk aversion periods, and Ether prices had recorded a 30% drop since the launch.”

On the contrary, the ETF Bitcoin, although they too have been oriented towards outflows in recent days, have had a more satisfactory path.

In the first 6 weeks of trading, in fact, exchange-traded funds on BTC recorded a net inflow of 300 million dollars, leading the race towards the new all-time high of the cryptocurrency.

CME Ethereum futures volumes in decline, while those on Bitcoin increase slightly

While Ethereum ETFs trigger large net outflows, even the futures volume data from the “Chicago Mercantile Exchange” (CME) are facing tough times.

In particular, according to what was reported by the provider CCData, CME futures volumes on ether decreased by 28.7% in August, reducing to 14.8 billion dollars.

We are talking about the most impactful volumetric drop since December 2023, with the options index also falling by 37% to 567 million dollars.

In parallel, the open interest of these CME instruments has seen a strong downward adjustment. The data, however, remain much better compared to those observed in Q3 2023.

Before the debut of ETH funds listed on American exchanges, futures instruments were the only ones available to investors to bet on the performance of the cryptocurrency through regulated options. 

The combination of outflows on ETFs and the decline in CME futures volumes are an unequivocal signal of the drop in institutional interest istituzionale for Ethereum. This is the technical comment from CCData regarding the current situation:

“This decline in trading volumes for ETH instruments suggests lower-than-expected institutional interest in the activity, particularly following the launch of spot ETH ETFs. The reduced inflows into spot ETH ETFs in August further support this trend. Additionally, the seasonal effects in August may have contributed to the reduction in commercial activity, with this trend likely to continue into September”.

It appears evident how at a global level there has been a shift in investor interest towards Bitcoin, the quintessential cryptocurrency. In August, the volume of CME bitcoin futures increased by 3.74% to 104 billion dollars, during the negative performance of Ethereum.

According to the data tracked by Wintermute, now the futures on Bitcoin represent 48% of the total notional open interest in the market. The figure is significantly increasing compared to the 31% share recorded in March.

Analysis of the ETH/BTC chart: will ETFs lead to a reversal of the multi-year bear trend?

Some experts argue that an upcoming recovery of Ethereum ETFs could trigger a rise in the price of ETH, particularly in the pair against BTC. Observing the chart of the cryptocurrency compared to Bitcoin, it is evident that a multi-year bear trend is underway.

Since September 2022, there has been a continuous decline in quotations, which to date shows an overall -48%. From the initial value of 0.08 (number of BTC per each ETH), we have dropped to the current level of 0.042. This is a very marked bearish dynamic, with the weekly chart trend constantly below the EMA 50, demonstrating the dominance of the bears.

Bitcoin thus appears as the dominant asset in the crypto world over the past two years of trading, with better performance compared to that of Ethereum

Despite the scenario clearly in favor of Bitcoin, we might finally observe a reversal soon. As analyst Michaël van de Poppe reports in his recent analysis, the 0.042 BTC level could act as strong support for an imminent recovery.

Currently, there is a bull divergence between the price of ETH/BTC and the RSI associated with it on the daily chart, from which a strong leg up is expected. In such a context, positive data from Ethereum ETFs with new net inflows could provide the necessary fuel to gear up the trend reversal.

We are therefore waiting for better times, with market timing already aiming for the coming weeks or the month of October. Pay particular attention to the level of 0.052 BTC from which the bulls would be called into action to push the chart towards new bullish price horizons.