While Bitcoin ETFs continue to draw in investments, spot Ethereum ETFs in the US are seeing large withdrawals.
Spot Ether exchange-traded funds (ETFs) headquartered in the United States have seen withdrawals for the past five days running, which is the longest stretch of consecutive outflows since the ETFs’ July 23 inception.
The majority of the investments made by the nine spot Ether ETH $2,761 ETFs that were recently permitted have been overshadowed by the outflows from the Grayscale Ethereum Trust (ETHE), which as of August 21 had topped over $2.5 billion.
According to data from Farside Investors, ETHE has been withdrawing money every day except for August 12, when the Grayscale fund reported no net flows.
Spot Ether ETFs experienced the longest run of withdrawals, as demonstrated above, losing $92.2 million over the course of five days between August 15–21.
Protecting against outflows of grayscale
Grayscale’s ETHE reported withdrawals of $158.6 million during this time. Comparable inflows from the Bitwise Ethereum ETF (ETHW), the Fidelity Ethereum Fund (FETH), and BlackRock’s iShares Ethereum Trust ETF (ETHA) helped lessen the harm, though.
On the other hand, since its inception, the Grayscale Ethereum Mini Trust (ETH) has maintained positive flows of $231.9 million and has not reported any outflows.
On August 20, ETHA also became the first Ether ETF to record $1 billion in net inflows. Spot Ether ETF net flows are currently – $458.5 million overall.
Investments are drawn to Bitcoin ETFs
Conversely, spot Bitcoin BTC $64,212 ETFs, which debuted in the US in January 2024, have $17.5 billion in net positive flows. Despite $19.6 billion in withdrawals from the Grayscale Bitcoin Trust, spot BTC ETFs continue to have a positive balance sheet.
Furthermore, for eight of the past ten days, the spot Bitcoin ETFs have had positive flows. According to statistics from Farside Investors, the BTC ETFs witnessed aggregate inflows of $88 million on August 20, the most in two weeks.
With inflows of $55.4 million, BlackRock’s iShares Bitcoin Trust led the group, increasing the product’s total net inflow since debut in January to $20.5 billion.
The net inflows into BlackRock’s iShares Ethereum Trust are about $1 billion
The first exchange-traded fund for ether to surpass the $1 billion threshold will be ETHA.
According to data from fund researcher Morningstar provided with Cointelegraph, BlackRock’s Ether exchange-traded fund (ETF) has achieved over $1 billion in net inflows, highlighting its advantage among rival ETFs.
The iShares Ethereum Trust (ETHA) has received $992 million in net inflows, according to Morningstar, putting the fund on pace to soon cross the $1 billion milestone.
ETHA’s net inflows are expected to reach $1 billion by the end of the trading day on August 21, but this is not a given, according to Bryan Armour, the director of research at Morningstar for passive strategies, who spoke with Cointelegraph. “In my conclusion, including fair one creation unit would make it remarkable.”
As of midday on August 21, the net assets of the Ether ETH $2,761 ETF were $837,898,429, well shy of $1 billion due to ETH’s poor performance since ETH ETFs began trading in July.
Net flows and performance are the two factors that affect net assets. According to Armour, underwhelming performance has left net assets significantly below total net flows into the fund.
According to fund issuers, registered investment advisers (RIAs), who oversee up to half of the $9 trillion ETF market’s fund flows, are showing a surprising interest in ETH ETFs.
According to Kyle DaCruz, director of digital assets product at asset VanEck, an asset management that sponsors cryptocurrency ETFs, “the adviser community’s significant interest in ETH ETFs has been a wonderful shock to me. DaCruz talked with Cointelegraph.
According to DaCruz, advisers find Ether more approachable than Bitcoin BTC $64,215 in terms of valuation and client explanation, as the blockchain network “is cash flow producing” and bears similarities to a technology company. Ethereum validators process network transactions in exchange for ETH fees.
As of the market closing on August 20, net assets in ETH ETFs were estimated by Morningstar to be around $7.3 billion.
With almost $25 billion in assets under management, Grayscale Investments, the biggest issuer of cryptocurrency funds, predicts that additional ETFs will soon be available.
Dave LaValle, global head of ETFs at Grayscale, stated on August 12 that “we’re going to see a number of more single asset products, and then also certainly some index-based and diversified products.”
