Ethereum ETFs Scored $49M Inflows as ETH Plunged
Ethereum (ETH) experienced a sharp 20% price drop recently, but that didn't stop investors from pouring money into ETH exchange-traded funds (ETFs). On Monday, U.S.-listed spot ETH ETFs saw almost $49 million in net inflows, highlighting strong market demand despite the declining price.
Big Numbers, Big Moves
Data tracked by SoSoValue reveals that ETH ETFs traded over $715 million, marking the highest trading volume since July 30. This surge in trading volume presents a mixed picture. While ETH’s price plummeted on Monday, it simultaneously drew attention from professional investors who bought the dip.
Breakdown of Inflows
Among the top performers, BlackRock’s ETHA led with $47 million in inflows. Fidelity’s FETH and VanEck’s ETHV each saw $16 million in inflows. Interestingly, Grayscale’s ETHE was the only ETF to experience outflows, totalling $46 million, yet its smaller Ethereum Mini Trust (ETH) attracted $7 million.
Since their inception on July 23, these ETH ETFs have collectively seen net outflows of $460 million, indicating that long-term demand hasn't fully matured. For comparison, Bitcoin ETFs recorded over $1 billion in net inflows within the first 12 days of trading.
Understanding the Price Drop
The drastic 20% decline in Ether’s price on Monday was its largest one-day fall since 2021. This plunge followed significant movements by Jump Crypto, a major trading firm, which transferred large amounts of ETH to centralized exchanges. The broader crypto market also faced selling pressure, compounded by over $340 million in ETH futures liquidations.
Ethereum’s Resilience
Amid this turmoil, the Ethereum network showed remarkable resilience, suggesting strong fundamentals. Observers like Alice Liu, lead researcher at CoinMarketCap, noted that decentralized applications (dApps) built on Ethereum remained robust despite the steep decline.
Silver Linings in DeFi and Staking
The sell-off may have had some positive effects as well. The Decentralized Finance (DeFi) market started picking up, with activities on the network ramping up significantly. Notably, there wasn’t a major increase in withdrawal queues for Lido’s liquid staking derivatives finance (LSDFi), and liquid staking continued functioning smoothly across different projects.
Liu also highlighted that gas fees—the cost to perform transactions on the Ethereum network—dropped back to more manageable levels of 10-15 Gwei after hitting a high of 370 Gwei.
Conclusion
Despite a dramatic price drop, the Ethereum network and ETH ETFs showed resilience, driven by professional investors taking advantage of the dip. The influx of funds into ETH ETFs and signs of strengthening fundamentals signal that Ethereum remains a solid investment choice in the evolving crypto landscape.
