Ethereum ETFs Face $133 Million Outflows, as Bitcoin ETFs Remain Stable Amid Market Volatility

• Ethereum spot ETFs saw $133.16 million in net outflows on their second trading day, highlighting market instability.
• Grayscale’s Ethereum Trust (ETHE) experienced $326.86 million in outflows, with high fees prolonging the sell-off period.
• Bitcoin ETFs recorded $44.51 million in net inflows, contrasting with Ethereum’s struggles due to different market conditions.

The recent debut of U.S. spot Ethereum exchange-traded funds (ETFs) has faced a rocky start. On their second day of trading, these funds recorded $133.16 million net outflows. This development contrasts with the more stable inflows seen by Bitcoin spot ETFs.

Ethereum ETFs Under Pressure

On 25th July, the nine U.S. spot Ethereum ETFs witnessed net outflows amounting to $133.16 million. This reversal from Tuesday’s positive flows highlights the current volatility in the Ethereum market. Grayscale’s Ethereum Trust (ETHE) was particularly affected, registering $326.86 million in net outflows. 

In contrast, other Ethereum ETFs saw net inflows, with Fidelity’s FETH leading with $74.46 million, followed by Grayscale Ethereum Mini Trust’s $45.93 million, Bitwise ETHW’s $29.64 million, and VanEck ETHV’s $19.84 million.

Source: FarsideUK

Comparing Bitcoin and Ethereum ETFs

While Ethereum ETFs struggled, Bitcoin ETFs experienced more stable performance. The 11 U.S. spot Bitcoin ETFs recorded $44.51 million in net inflows on Wednesday. BlackRock’s IBIT led with $65.99 million in net inflows. However, Grayscale’s GBTC saw $26.22 million in net outflows.

This disparity between Ethereum and Bitcoin ETFs can be partly attributed to the differing fee structures and market conditions. Grayscale’s ETHE, with its 2.5% fee, is notably higher than the 1.5% fee for GBTC. Historical data suggests that high fees can prolong the sell-off period for ETFs.

Market Reactions and Price Impact

The trading volume for Ethereum ETFs was robust, with about $951 million on Wednesday, down slightly from $1.05 billion on their first trading day. Despite the high trading volumes, the outflows led to a sharp decline in Ether’s price, which fell by 7.99%  in the past 24 hours to around $3,174.67. 

Bitcoin also saw a price drop of 2.62%, trading at $64,269.42, influenced by ongoing macroeconomic factors and the latest Mt. Gox transfers.

These ETF developments occurred alongside a broader downturn in the U.S. stock market. The Nasdaq Composite index closed down 3.6%, its worst performance since October 2022, while the S&P 500 fell 2.3%, marking its worst day since December 2022. This general market decline may have contributed to the outflows from Ethereum ETFs as investors reassessed their positions.

Future Outlook for Ethereum ETFs

Considering the initial performance of these ETFs and the historical context of similar funds, the current selling pressure on Ethereum ETFs may persist for several weeks. During this period, ETH/BTC is likely to continue declining due to the absence of comparable sell pressure on Bitcoin.