Launched on American soil at the end of July, Ethereum spot ETFs are struggling to take off. For some analysts, investors from traditional finance would be reluctant to position themselves on Ethereum spot ETFs when they have already invested in Bitcoin spot ETFs.
Net outflows from Ethereum spot ETFs at highest point since late July
This Monday, Ethereum spot ETFs saw very large net outflows, the largest since July 29. In all, $79 million net outflow have been recorded.
By the end of July, spot Ethereum ETH had recorded 4 consecutive days of outflows, up to $98 million in net outflows on July 29 alone. It was necessary to wait until the next day, July 30, for these ETFs to return to the green with a net inflow of $33.6 million.
💡 Find out how to invest in an Ethereum spot ETF in France
Regarding the net outflows on September 23 for Ethereum spot ETFs, These come mainly from Grayscale's ETHE, which alone has an outflow of $80 million.. Other products did not see any net flows that day, except for Bitwise's ETHW which saw a net inflow of $1.34 million.
Daily evolution of entries and exits on Ethereum spot ETFs
This increase in net outflows occurs while the cryptocurrency market is doing rather well GOOD thanks to the interest rate cut initiated by the Federal Reserve (Fed). This last one had a positive impact on the price of Ether (ETH), up about 11% over the last 7 days.
The mismatch between ETH price dynamics and Ethereum spot ETF flows suggests investors remain uncertain about the cryptocurrency's long-term growth prospects.
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Ethereum spot ETFs eclipsed in favor of Bitcoin spot ETFs?
Several analysts have offered their explanations for this discrepancy. One of them, Peter Chung, research director at Presto Labs, claims that investors from traditional finance have difficulty understanding the interest of investing in Ethereum while for them, Bitcoin (BTC) seems to do the trick :
Investors from traditional finance
may not react as enthusiastically to ETH's investment opportunities as they do to BTC's.. The paradigm of investing in gold as a hedge against inflation is well known. Therefore, it is not difficult for traditional finance investors to get used to the idea that digital gold is associated with Bitcoin. […] Even if they manage to reconcile, their level of conviction will need to be high enough to justify adding a second exposure to a digital asset after a BTC ETF.
👉 Also read – BlackRock Requires 12-Hour Withdrawals for Bitcoin ETF Following Coinbase Reserve Concerns
Launched in January in the United States, Bitcoin spot ETFs have certainly experienced significant capital outflows during the first part of September, but eventually came back positive. As of September 23, They recorded net inflows of $4.56 million for a cumulative net inflow of $17.7 billion since their launch on American soil..
For comparison, the Ethereum spot ETFs launched on July 24 across the Atlantic recorded cumulative net outflows of $686.68 million.
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Source: SoSoValue
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Surprised by the rise of crypto-assets in the late 2010s, I started to closely follow this sector that fascinates me to the highest degree. When I am not in football stadiums, rugby or handball halls, I work on writing relevant articles about cryptocurrencies and more broadly, Web3.
Zacharie Tazrout
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