Spot Ethereum ETF Inflows Trimmed, Here’s the True Picture

The spot Ethereum Exchange-Traded Funds (ETFs), launched on July 23, faces dwindling inflows. This trend has started raising concerns among market participants. Beyond inflows, these ETFs are underperforming in volumes, indicating reduced investor interest.

Several factors might be linked to Ethereum’s declining prices. The lack of margin availability might account for the reduced inflows into spot Ethereum ETFs.

Figures Showing Lowered Interest in ETH ETF Adoption

Luke Martin, a renowned crypto analyst and host of the Stacks Podcast, describes current inflows into Ethereum ETFs as “wild.” Highlighting Farside Investors’ data, Martin points out that no major flows and outflows have been recorded into Ethereum ETFs in the past few days.

“Flows have dwindled down to virtually zero, and it’s only been one month since launch,” Martin stated.

According to Farside data, all nine ETH ETFs recorded zero inflows and outflows on Friday, August 31, 2024. This follows a similar previous day record, with only Grayscale Ethereum Trust (ETHE) recording $5.3 million outflows. American multinational investment firm BlackRock remains the biggest ETH ETF issuer, attracting $49.1 million on August 13.

Galaxy Research added that Ethereum ETFs are trading at lesser volumes than their Bitcoin counterparts. Specifically, during the first 25 days, the ratio of Ethereum ETF volume to Bitcoin ETF volume has continued to decline.

Additionally,  Ethereum ETFs are below the ETH/BTC CEX volume and market capitalization ratios.

Ethereum Price Trend Since ETF Launch

There were high expectations that the launch of Ethereum ETFs would create a bullish momentum in ETH’s price. Analysts even forecasted that ETH could reach $4000 once the ETFs commence trading. At the time of the prediction, ETH was trading at the $3400 price range.

Surprisingly, ETH has failed to meet analysts’ expectations, even dropping below key levels. A day after the ETFs launched, Ethereum’s price dropped slightly to trade at $3,466. However, it indicated a rebound above the $4,000 resistance level. Shortly after, ETH’s price spiked to $3,500 after experiencing a 39.7% increase.

By August, the value of ETH dropped substantially to the $2,500 level, despite inflows into the Ethereum ETFs. On August 6, BlackRock’s ETHA recorded inflows of $109.9 million, negating the inflows. On the other hand, Grayscale’s ETHE saw outflows of $39.7 million.

At press time, ETH price was trading at $2,520, down by 0.04% in the past day.

Can Ethereum ETF Topple Bitcoin ETF?

With lower recorded volumes in the Ethereum ETF market, observers are beginning to question the possibility of the fund outperforming spot Bitcoin ETFs. Vance Spencer, co-founder of Framework Ventures predicted a balanced approach to Ethereum and Bitcoin ETFs.

However, investments in the spot Bitcoin ETF market have grown well above their Ethereum counterparts. Notably, spot Bitcoin ETFs now hold about 300,000 BTC valued at about $19 billion, in just seven months of trading. If these investment instruments continue at this pace, it might be difficult for Ethereum ETFs to outpace them.

Nevertheless, some investors and analysts are still optimistic about the Ethereum ETFs’ future performance. Crypto investor Jesse Eckel claims Ethereum ETFs may see more interest when market momentum picks up.