Ethereum spot ETFs experienced a net outflow of $98.3 million on July 29, marking the fourth consecutive day of outflows. The Grayscale Ethereum Trust (ETHE) had a substantial single-day outflow of $210 million, while the Grayscale Ethereum Mini Trust (ETH) attracted $4.9 million in inflows. Other ETFs showed mixed results, with BlackRock’s iShares Ethereum Trust (ETHA) seeing an inflow of $58.2 million and Fidelity’s Ethereum Fund (FETH) garnering $24.8 million. This trend of outflows continued in the following days, reflecting investor behavior similar to previous instances seen with Bitcoin Grayscale Trust.
In the first week of trading, nine ETFs holding Ethereum experienced outflows totaling $340 million, amidst a period marked by investor withdrawals from high-fee legacy products converted to exchange-traded funds. Eight new Ether ETFs, approved by the U.S. Securities and Exchange Commission, amassed $1.17 billion over four trading days ending July 26. The most substantial inflows were into funds from BlackRock, Bitwise, and Fidelity, which attracted $442 million, $266 million, and $219 million, respectively. Grayscale’s established Ethereum Trust saw a loss of $1.5 billion, with investors potentially viewing the conversion of Grayscale’s fund as a strategic exit point.
The launch of new Ether ETFs coincided with a decline in Ether’s price, which fell by 4.6% to around $3,331 since the ETFs began trading on July 23. Despite this recent dip, Ether has gained approximately 46% for the year, maintaining its position as the second-largest cryptocurrency by market capitalization after Bitcoin. Grayscale also introduced the “Ethereum Mini Trust” with a current fee of 0% compared to the 2.5% fee of the primary trust, attracting $91 million in its initial week. This preference for lower-cost options among investors may influence the future dynamics of the digital asset investment landscape.
The digital asset investment landscape continues to draw substantial interest, with inflows maintaining a positive trajectory for the fourth consecutive week. Last week saw an influx of $245 million, with year-to-date inflows reaching a record $20.5 billion. Bitcoin products have continued to attract significant investments, with inflows amounting to $519 million last week alone, bringing month-to-date inflows to $3.6 billion and YTD inflows to an unprecedented $19 billion. The surge in investment is believed to be influenced by the political climate in the United States, with comments suggesting Bitcoin could be considered a strategic reserve asset.
Shubh Varma, CEO and Co-founder of Hyblock Capital, highlighted the positive market dynamics for Bitcoin following former President Donald Trump’s bullish remarks on the cryptocurrency. Varma noted that such a pro-crypto stance from a major political figure would have been unimaginable just two years ago, signaling a significant shift in the narrative surrounding Bitcoin and its potential future. Investors are also anticipating a potential rate cut by the Federal Reserve in September 2024, which has bolstered sentiment towards Bitcoin. Overall, the digital asset investment landscape continues to see significant interest and inflows, reflecting a positive outlook for the sector.
