Ethereum ETFs Attract $2 Billion in Four Weeks
In the world of cryptocurrency investments, spot Ethereum (ETH) exchange-traded funds (ETFs) have captured significant attention, amassing over $2 billion in inflows in just four weeks. This impressive figure, sourced from Farside Investors' data, positions these funds among the top ETF launches in history, excluding the outflows from Grayscale’s ETHE, which nearly reached $2.5 billion.
A Historic Achievement in the ETF World
According to Nate Geraci, CEO of ETF Store, if these inflows were consolidated into a single product, it would represent the fourth-largest ETF launch ever. The only launches surpassing this milestone are all spot Bitcoin (BTC) ETFs, including BlackRock's IBIT, Fidelity's FBTC, and ARK 21Shares' ARKB. Geraci also noted that the iShares Ethereum ETF alone ranks in the top seven ETF launches.
Global ETF Flows and Ethereum's Position
Eric Balchunas, a senior ETF analyst at Bloomberg, reported that ETFs globally have seen year-to-date flows totaling $911 billion. Of this, US-traded spot crypto ETFs account for $17 billion in net flows, representing about 2% of global flows. Noteworthy is the IBIT, the third-largest ETF by inflows, which is closing in on $20.5 billion, while FBTC has nearly $10 billion in inflows.
Challenges Faced by Ethereum ETFs
Despite these substantial inflows, Ethereum ETFs have not matched the performance of their Bitcoin counterparts. Analysts from Bitfinex attribute this to Ethereum's weak market performance, noting a 40% decline over the past month. Key players such as Jump Crypto, Wintermute, and Flow Traders have collectively sold 130,000 ETH since the ETFs launched. Additionally, macroeconomic factors, like Japan's recent interest rate hike, have contributed to a reduced risk appetite among investors.
Market Trends and Risks
Aurelie Barthere, Principal Research Analyst at Nansen, highlighted that the broader crypto market suffered significant realized losses during a March sell-off, affecting traders involved in multiple crypto narratives. Another sell-off occurred between July and August, revealing a growing correlation between crypto and equities. This has placed additional pressure on Ether amid strong but decelerating US growth and elevated valuations in traditional risk assets like US equities.
