Spot Ethereum ETFs Hit the Market, but the Results Are Underwhelming Compared to Bitcoin ETFs

A few months after the SEC gave the initial green light, the spot Ethereum ETFs officially hit the ground last Tuesday. However, the immediate results have been quite underwhelming

The much-anticipated spot Ethereum ETFs finally arrived last Tuesday, a few months after the SEC gave the initial green light. However, the immediate results have been underwhelming, inviting comparisons to the launch of the spot Bitcoin ETF in January this year.

ETH ETFs vs. BTC ETFs

Earlier this week, CryptoPotato reported that the nine spot Ethereum ETFs had a strong first day, attracting over $106 million in net inflows. As expected, the converting Grayscale fund (ETHE) saw substantial withdrawals of nearly $500 million, but inflows into the others (especially ETHA and ETHW) helped cushion the blow.

The following three days, however, painted a different picture as the trend quickly reversed. Instead of overall inflows, the daily figures turned red, with $133.3 million withdrawn on July 24, $152.4 million pulled out on July 25, and $162.7 million taken out on July 26.

It’s a concerning trend, especially since the outflows are increasing. Grayscale’s ETHE lost $326.9 million, $346.2 million, and $356.3 million, respectively, during those three days.

However, demand for the remaining products, even BlackRock’s ETHA and Fidelity’s FETH, was waning, and they failed to offset the massive withdrawals from ETHE. Hence, the figures after the first four days of trading show a total of $341.8 million withdrawn from the spot Ethereum ETFs.

This contrasts sharply with the first four days of the spot Bitcoin ETFs, which saw over $650 million in inflows on the launch day, followed by $203 million on the second, and $453.8 million on the fourth. Minor outflows were observed only on the third day ($52.7 million). The net inflows in total amounted to nearly $1.260 billion in just four days, highlighting the vast disparity compared to the Ethereum ETFs.

Price Performances

While the difference in demand for the two largest cryptocurrencies is more than palpable (for the time being, at least), the price performances of the underlying assets during the first several days of trading after their respective ETFs launched have been surprising.

With over $1.250 billion flowing into the BTC ecosystem, one might expect bitcoin’s price to be surging, but they’d be mistaken. The cryptocurrency did shoot up from $45,000 to $49,000 after the ETFs hit the markets on January 11, but it slid down to $41,300 by the fourth day.

ETH, meanwhile, started with a price drop from $3,500 to $3,000, which was somewhat expected given the outflows, but it bounced off and currently trades at around $3,300. Thus, ether is down by only 6.5% now, despite the significant outflows, whereas BTC declined by 16% even though the ETFs were a resounding success in their early days.

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