Grayscale Responsible For Heavy Spot Ethereum ETF Outflows

Following its unexpected approval by the United States Securities and Exchange Commission (SEC), the spot Ethereum ETFs (exchange-traded funds) became one of the most important narratives in the cryptocurrency space.

The recent launch of spot Ethereum exchange-traded funds (ETFs) has been a major talking point in the cryptocurrency world, following its unexpected approval by the United States Securities and Exchange Commission (SEC). However, these crypto investment products appear to be falling short of expectations after a lackluster trading debut.

Grayscale's ETH Trust, a Grayscale product that tracks the performance of Ether, saw heavy outflows on Friday, according to data from ETF Trends. The fund experienced a single-day outflow of over $356 million. In total, the Grayscale product has recorded a cumulative net inflow of $1.51 billion since the launch of the spot Ethereum ETFs.

The recently launched spot Ethereum ETFs, which began trading on Tuesday, July 23, have seen a net outflow of roughly $341 million in the opening week, as reported by Chainparency. These ETFs posted a net inflow of approximately $106.8 million on day one, which market experts deemed a "solid start," especially considering the performance of Bitcoin ETFs earlier this year.

However, the following days saw a "red day" for the spot Ethereum ETFs, with over $133 million flowing out of the products on Wednesday, July 24. This was followed by further outflows, with a net outflow of $152 million on Thursday, July 25, and $162 million on Friday, July 26.

no surprise, Grayscale's ETH Trust (ETHE) was responsible for a bulk of the capital outflow, according to ETF Trends. The fund, which serves as a proxy for spot Ethereum ETFs, saw a single-day outflow of over $356 million on Friday.

Since the launch of the spot Ethereum ETFs, the Grayscale product has recorded a cumulative net inflow of $1.51 billion. Notably, Grayscale's Grayscale Bitcoin Trust (NYSE: GBTC) began trading on OTCQX Best Markets in 2024.

Interestingly, the price of Ethereum has shown a decline following the launch of the Ether ETFs. According to data from CoinGecko, the "king of altcoins" has lost over 7% in value over the past week. At the time of writing, ETH's price is around $3,248, showing a 1.1% decrease over the past day.

As reported by CryptoQuant's latest analysis, the influx of fresh capital, such as ETFs, has a less significant impact on Ethereum than on Bitcoin, based on a metric called the "realized capitalization multiplier."

Recent data shows that each dollar of fresh money invested in Bitcoin could increase BTC's market capitalization by $5. In contrast, the effect is much lower for Ether, whose market cap would only increase by $1.3 for each invested dollar.

In 2024, every $1 invested in #Bitcoin increased its market cap by $5, while for ETH, it was only $1.3.

New money flows have a weaker effect on $ETH than Bitcoin. pic.twitter.com/CtAmmMVL8g

— CryptoQuant.com (@cryptoquant_com) July 26, 2024

This revelation suggests that ETH's multiplier effect has been significantly lower than that of Bitcoin so far in 2024.

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