Spot Ethereum ETF Recorded $113.3M Outflows; What’s the Reason?

Spot Ethereum ETF Performance: Key Insights

Approved on July 22, the Spot Ethereum exchange-traded funds (ETFs) showed inconsistent performance. On the second trading day, the spot Ethereum ETF experienced net outflows totaling $113.3 Million, largely due to significant withdrawals from Grayscale’s Ethereum Trust. 

Ethereum was trading at $3,160.65, after an intraday drop of 8.90% with $379,870,939,173 in market cap and $22,327,478,699 in 24-hour volume. 

The overall performance of the new ETFs was negatively impacted by substantial outflows from the recently converted Grayscale Ethereum Trust (ETHE), which saw $326.9 Million in withdrawals.

Source: SoSo Value 

Grayscale launched ETHE in 2017, permitting institutional investors to purchase ETH with a six-month lock-up period. Since its transformation to a spot Ether fund on July 22, investors have been able to sell their ETH effortlessly.

In the two days following its conversion, ETHE experienced $811 million in outflows, indicating that investors have sold off just over 9% of the fund’s holdings.

Out of the eight newly launched spot Ethereum ETFs, seven recorded net inflows on the second day. Leading the inflows were the Fidelity Ethereum Fund (FETH) with $74.5 million and the Bitwise Ethereum ETF (BITW) with $29.6 Million.

Fidelity and Grayscale Recorded Highest Inflow

Grayscale (ETH) and Fidelity Ethereum Fund (FETH) recorded the highest inflow on July 24.

FETH recorded a net inflow of $74.5 Million with $145.78 Million in net cumulative inflow. The issuer is charging 0.25% in fee and holds net assets worth $148.08 Million. At the time of writing, FETH was trading at $33.67.

Grayscale (ETH), alternatively, documented a net inflow of $45.93 Million and a cumulative inflow of $61.08 Million, showcasing investor's trust towards Grayscale. At the time of writing, it was hovering at $3.17 with $1.04 Billion in net assets. 

BlackRock’s iShares Ethereum Trust (ETHA), which had the highest inflows on July 23, saw a more modest $17.4 Million in inflows on July 24. Bitwise (ETHW) and VanEck (ETHV) documented a net inflow of $29.64 Million and $19.84 Million, respectively.

Furthermore, 21Shares and VanEck have filed for the Spot Solana ETF which is expected to get the green light somewhere in 2025. 

Conclusion 

The second trading day for spot Ethereum ETFs saw significant net outflows of $113.3 Million, primarily driven by large withdrawals from Grayscale’s Ethereum Trust. Despite this, seven out of the eight new ETFs recorded net inflows, with FETH and BITW leading the way. Grayscale and Fidelity demonstrated strong investor confidence with substantial inflows.

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