Ethereum ETFs See $106M Inflows, Now Face $341.8M Outflows; BlackRock Warns of Rising Scams

• Spot Ethereum ETFs saw strong initial inflows of $108M but faced $341.8M in outflows over three days, similar to early Bitcoin ETF trends.
• BlackRock alerts investors about increasing crypto scams tied to Ethereum ETFs, urging caution as fraudsters misuse its name to trick people.
• Excluding Grayscale outflows, Ethereum ETFs saw 79% net inflows, which shows a different investor sentiment than that of Bitcoin ETFs.

Spot Ethereum ETFs officially began trading on July 23, drawing attention. In the first week, nine new ETFs attracted over $106 million in net flows. However, they are now encountering challenges. Following a strong beginning, these funds have had net outflows of $341.8 million over the past three days. This trend mirrors the early days of Bitcoin ETFs, where outflows followed initial enthusiasm.

Initial Buzz and Comparisons to Bitcoin

Over $108 million flowed into these funds, though this is only 16% of the $655 million that Bitcoin ETFs attracted in a similar timeframe. However, excluding the outflows from Grayscale’s ETHE and GBTC conversions, Ethereum’s share of ETF inflows jumps to 79%. This disparity highlights differing investor sentiment between the two leading cryptocurrencies.

The new Ethereum ETFs have struggled to maintain momentum. Three consecutive days of net outflows have raised concerns. This pattern was somewhat expected, given historical trends with Bitcoin ETFs. After initial outflows, Bitcoin ETFs eventually rebounded. The situation with Ethereum ETFs may follow a similar path, with investors reassessing their positions after the initial hype.

BlackRock’s Warning and Rising Scams

A surge in frauds involving cryptocurrency investments has coincided with BlackRock’s July 23 launch of its Spot Ethereum ETF. With $10.6 trillion in assets under management, the largest asset manager in the world has sent out a dire warning. Scammers are increasingly using the name BlackRock to trick prospective investors. The business clarified that it never uses social media to ask for money or investments.

In a post on X, BlackRock stated, “There has been a spike in investment-related scams, including directing users toward crypto investment-related websites and/or social media platforms such as WhatsApp or Telegram.” The company urged vigilance and advised against proceeding with suspicious activity.

Scammers use refined methods to target potential victims. They often create phishing websites and fake platforms to capture personal information. This data is then used to offer seemingly attractive investment opportunities. 

These fraudsters invest time in researching their targets to build rapport and gain trust. BlackRock advised, “Please remain vigilant, and if you suspect fraudulent activity, do not proceed.”