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Spot Ether ETFs Off to Strong Start, But Lag Bitcoin ETFs, Analyst Says
Spot Ether ETFs Off to Strong Start, But Lag Bitcoin ETFs, Analyst Says
Place Ethereum Exchange-traded funds (ETFs) saw more than $100 million in net inflows on their first day of trading on July 23. While the strong start is remarkable, it doesn’t match the impressive debut of Bitcoin ETFs in January, and analysts suggest that Ether ETFs may have a harder time gaining traction with traditional investors.
Early inflows into Ether ETFs have ranged from 10% to 20% of what Bitcoin ETFs achieved on their first day. This is in line with expectations given Bitcoin’s larger market cap, but raises concerns about Ether’s appeal to traditional investors. Adrian Fritz, head of research at 21Shares, a major issuer of BTC and ETH ETFs, said, “The Bitcoin Spot ETF has set new standards as the most successful ETF launch in financial history.”
Fritz noted that Bitcoin’s narrative as an emerging store of value is simpler and more widely understood, while Ethereum’s value proposition is more complex, requiring more educational efforts to attract investors. Despite these challenges, Fritz remains optimistic about Ethereum’s potential to attract significant institutional interest.
Strong initial inflows into the Ether ETFs helped ease market concerns about their launch. The Ethereum Volmex Implied Volatility Index (EVIV), which measures ETH’s 30-day expected volatility, fell 4 points to around 65 within 24 hours of the ETF’s listing, according to CoinMarketCap. Cole Kennelly, founder of Volmex Finance, explained that the market had priced in the uncertainty ahead of the ETF launch, but that the “volatility drop” that followed suggests ETF flows could stabilize ETH spot markets.
Among the new spot Ether ETFs, BlackRock’s iShares Ethereum Trust ETF (ETHA), Bitwise Ethereum ETF (ETHW), and Fidelity Ethereum Fund (FETH) led the way in terms of inflows. According to Bloomberg data, these funds attracted about $266 million, $204 million, and $71 million, respectively.
However, these inflows were partially offset by large outflows from Grayscale’s legacy fund, ETHE, which saw about $484 million in outflows. Launched in 2017 under a different fund structure, ETHE charges a 2.5% management fee, significantly higher than newer ETH spot funds. In total, the eight new Ether spot ETFs listed on July 23 attracted about $590 million in net inflows.