Coinshares Report: Ethereum ETF Attracts $2.2 Billion in Funds in One Week

Last week, the Ethereum spot ETF launched in the United States triggered a massive inflow of funds. This emerging financial product quickly caused huge waves in the entire cryptocurrency market and quickly became the focus of the cryptocurrency market.

CoinShares’ latest report reveals that with the launch of the Ethereum spot ETF, the market has witnessed an influx of $2.2 billion in funds, which not only represents a turning point for the Ethereum market, but also heralds investors’ strong interest in this crypto asset. interest.

Ethereum ETF surges, How is Bitcoin performing?

Latest data from Coinshares shows that the launch of the Ethereum ETF not only brought massive capital inflows, but the size of Ethereum exchange-traded products (ETPs) also increased by an astonishing 542%. This surge in capital demonstrates the rapidly growing appetite among investors to invest in Ethereum through regulated financial products.

However, Coinshares head of research James Butterfill noted that this growth figure is actually “somewhat controversial.” Grayscale leveraged about $1 billion of its existing closed-end trust capital to fund its new mini-trust ETF, which may have been a reason for the steady outflows in recent years, he explained.

Despite the controversy, the launch of the ETF is still an important milestone for the cryptocurrency market as it is in line with the broader market trend of investors seeking diversified and safe investment channels.

Cryptoasset flows last week | Source: Coinshares

However, the overall situation in the digital asset market is not entirely optimistic. For example, Grayscale’s Ethereum Trust saw a net outflow of $285 million, showing a divergence in market attitudes towards certain products.

Meanwhile, Bitcoin has maintained its appeal, with $3.6 billion in inflows over the past month, trailing Ethereum. Total inflows so far this year have hit a record $19 billion, helped by speculation about the U.S. election and expectations of potential changes in Federal Reserve policy.

Butterfill specifically pointed to discussions surrounding Bitcoin as a potential strategic reserve asset and the increased likelihood of the Federal Reserve cutting interest rates in September 2024 as possible reasons for increased investor confidence.

Additionally, the Coinshares report provides an in-depth analysis of the consequences of capital flows, highlighting that total inflows across all digital assets reached a record $20.5 billion in 2024. The surge in trading volume has fueled the launch of an Ethereum spot ETF in the U.S. and may signal continued interest in such products.

Market performance analysis of BTC and ETH

Although spot ETF products for Bitcoin and Ethereum have attracted large inflows, their price performance in the market has not kept pace with them. After the launch of Ethereum’s spot ETF, the market experienced a typical “sell the news” phenomenon, causing its price to fall to a low of $3,098 in a short period of time. Although it has since recovered and is currently trading above $3,300, Ethereum’s spot ETF product has yet to show the strong performance expected compared to the market’s enthusiastic response to the ETF launch.

Meanwhile, Bitcoin also experienced a brief price drop following the launch of the Ethereum ETF, briefly hitting a low of $64,000. However, Bitcoin soon showed its resilience, with the price quickly recovering and rising. Currently, Bitcoin is trading at $66,400, a correction from the high of $70,079 on the 29th. Of particular interest is the fact that Bitcoin’s current bullish trend is partly due to former President Donald Trump’s positive remarks at the Bitcoin Conference 2024, which may have had a significant positive impact on market sentiment.

Overall, although the ETF products of the two major cryptocurrencies are sought after by funds, the actual performance of their market prices presents a complex and changeable situation, showing that the market's initial response to these financial innovation products is cautious and selective. of. When evaluating these products, investors need to comprehensively consider the impact of market sentiment, price trends, external factors and other factors.

Conclusion:

Although the Ethereum spot ETF launched in the United States attracted a large amount of capital inflows, its market price performance did not keep pace with it, showing that the market's initial response to this financial innovation product was cautious. At the same time, although Bitcoin has also experienced price fluctuations, its status as a potential strategic reserve asset has been recognized by the market, and capital inflows have continued to grow.

While the market's reaction to these products has been mixed, they provide investors with new investment avenues and bode well for continued interest in these products. As investors further adapt to these tools, the cryptocurrency market is expected to usher in more mature and robust development.

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