Ethereum ETFs show mixed results: ‘Should we be worried?’

• ETHA surpassed $1 billion in inflows, leading Ethereum ETFs despite mixed market sentiment.
• ETHE faces continued outflows, while Bitcoin ETFs like IBIT outperform Ethereum investments significantly.

Following the debut of the Ethereum [ETH] ETF, the market has experienced significant fluctuations.

BlackRock’s iShares Ethereum Trust (ETHA) has quickly established itself as a market leader, becoming the first ETH ETF to surpass $1 billion in net inflows.

This achievement underscores ETHA’s growing influence in the crypto space.

ETH ETF update

However, not all ETFs have shared in this success.

Grayscale’s ETHE has been facing a steady outflow streak, and the overall market sentiment remains cautious, as the Spot Ethereum ETF has recorded four consecutive days of outflows.

Despite ETHA’s zero flows on the 21st of August, its impressive accumulation of $1.004 billion to date as per Farside Investors, market dynamics suggest a mixed outlook for ETH ETFs.

Commenting on the discrepancy between the two ETFs, the crypto market analysis firm Future Trends observed,

“Is this a sign of trouble, or just a temporary dip? Should we be worried?”

This highlights that despite being new, ETHA has quickly become the second-largest Ethereum investment vehicle, amassing over $860 million in assets.

Its $1 billion net inflows, surpassing the next three largest Ethereum ETFs combined, highlight its growing dominance and investor preference for regulated ETH exposure. 

Its impact on ETH

Hence, if the current trend continues, we might soon see ETHE also shift into an inflow streak, which could significantly impact ETH’s price—a price that was once expected to hit $4,000 after the ETF launch but has instead underperformed.

As of the latest update from CoinMarketCap, ETH was trading at $2,636. Although the largest altcoin has gained 2.37% in the past 24 hours, the situation remained precarious.

The Relative Strength Index (RSI) was still below neutral, indicating that bears were outpacing bulls. Additionally, with the Bollinger Bands narrowing, it seemed the bearish momentum may persist.

Source: Trading View

Execs have something unique to offer

Contrary to the common assumption that ETF launches automatically boost Ethereum and other assets, crypto analyst ZERO IKA contended otherwise. He argued, 

“The thing that ETFs are just “bullish engines” is as far from reality as possible.” 

He cautioned that institutions and hedge funds often exploit ETFs to manipulate markets through buying and selling tactics, challenging the notion that ETFs are inherently bullish.

That being said, despite the notable success of BlackRock’s ETHA, ETH ETFs as a group have lagged behind their Bitcoin counterparts, with cumulative net outflows surpassing $440 million.

Bitcoin ETF stands up to the hype

This stands in stark contrast to the initial performance of spot Bitcoin [BTC] ETFs, which saw rapid asset accumulation, totaling over $11 billion within just one month.

Remarkably, BlackRock’s iShares Bitcoin ETF (IBIT) has set a record with an astounding $20.5 billion in assets, outstripping the combined net inflows of all Bitcoin ETFs as per Farside Investors.

This underscores a persistent preference for Bitcoin among investors and highlights the ongoing challenges faced by Ethereum-focused investment products in gaining similar traction.