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The post Ethereum ETFs Hit Wall Street: Strong Start Derailed by $341M Outflows appeared first on Coinpedia Fintech News
A few months after the SEC approved them, spot Ethereum ETFs officially began trading on July 23. Earlier this week, the nine new ETFs had a strong start, drawing over $106 million in net flows. While the initial response has been enthusiastic, the new ETFs are already facing some hurdles.
Ethereum ETFs: A Strong Start
The debut of spot Ethereum (ETH) ETFs on Wall Street generated considerable buzz, with $108 million flowing into these funds. However, this amount represents only 16% of the $655 million that entered Bitcoin (BTC) ETFs during a similar period. Excluding the outflows from Grayscale’s ETHE and GBTC conversions, Ethereum’s share of ETF inflows jumps to 79%.
One of the main events of the last week was the launch of the spot ETH ETFs in the US.
After Bitcoin, Ethereum is now officially on Wall Street, and this has generated a wave of enthusiasm.
I spent the weekend analyzing the new ETH ETFs to date.
: Here's my main takeaways:
However, the new ETFs have faced challenges in maintaining momentum. After a strong start, the new ETH ETFs have experienced three consecutive days of net outflows, totaling $341.8 million. This trend was somewhat expected, as historical patterns with Bitcoin ETFs showed similar initial outflows.
The situation with Ethereum ETFs echoes the early days of Bitcoin ETFs, where initial outflows were followed by a rebound.
Compare Ethereum and Bitcoin ETFs
Meanwhile, the outflows from ETH ETFs are notably larger than those seen with Bitcoin’s GBTC at its launch. This difference is attributed to ETHE trading at net asset value during conversions, unlike GBTC, which was still at a discount when its spot ETFs launched.
However, despite the strong initial interest, demand for other products, including BlackRock’s ETHA and Fidelity’s FETH, has waned. These ETFs couldn’t compensate for the significant withdrawals from ETHE.
As a result, the data from the first four days of trading shows a net outflow of $341.8 million from the spot Ethereum ETFs.
ETH Price Analysis
Following the launch, Ethereum’s price saw some volatility but has since stabilized between $3,200 and $3,300. This price action is similar to Bitcoin’s experience when its ETFs first launched. Historically, the “ETF effect” led to a recovery in Bitcoin’s price after an initial period of fluctuation.
Despite a 3.15% correction over the past week, Ethereum has bounced back strongly, with a 4.84% increase in the last day. It is currently trading at $3,366, with a 24-hour high of $3,384.53 and a trading volume of $11.076 billion.
If the positive market sentiment continues, Ethereum could build on this momentum, break through its resistance level at $3,700, and potentially reach $4,000.
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