Ethereum ETFs Drive $2.2B Inflows as Grayscale Faces $285M Outflows
Key Insights
- Spot Ether ETFs debut in the US, generating $2.2 billion in inflows and driving a 542% rise in Ethereum ETPs.
- Bitcoin continues to thrive with $3.6 billion in inflows last month, hitting a historic YTD total of $19 billion.
- Grayscale’s Ethereum Trust faces $285 million in net outflows amid the launch of new Ether ETFs in the US.
The launch of spot-based Ether exchange-traded funds (ETFs) in the United States has resulted in substantial inflows, marking one of the largest increases in asset acquisition since December 2022. According to a report by CoinShares, the new ETFs garnered $2.2 billion in inflows, alongside a notable rise in Ethereum exchange-traded products (ETPs).
Record-Breaking Inflows for Spot Ether ETFs
The newly introduced spot Ether ETFs have demonstrated a significant impact on the digital asset market. CoinShares reported that these ETFs accumulated $2.2 billion in inflows, reflecting a 542% increase in ETH ETPs. This surge underscores the growing interest and confidence among investors in Ether-based financial products.
Despite this influx, Grayscale’s Ethereum Trust faced considerable outflows. The trust experienced $285 million in net outflows, highlighting a shift in investor preferences following the introduction of the new ETFs.
Bitcoin’s Steady Inflows Amid Market Dynamics
While Ethereum saw substantial inflows, Bitcoin also attracted significant investment. Over the past month, Bitcoin has recorded $3.6 billion in inflows, contributing to a year-to-date (YTD) total of $19 billion. This marks a historic high for Bitcoin inflows, driven by speculation surrounding upcoming US elections and the potential for Bitcoin to serve as a strategic reserve asset.
CoinShares analysts attribute the sustained interest in Bitcoin to renewed investor confidence, bolstered by expectations of a Federal Reserve rate cut in September. This anticipated monetary policy adjustment has reinforced Bitcoin’s appeal as a hedge against economic uncertainties.
Growth Trends in the Digital Asset Market
The digital asset market continues to exhibit robust growth, with total assets under management reaching $99.1 billion. The year 2024 has already seen a record-breaking $20.5 billion in total inflows, indicating strong investor interest and participation in digital assets. Trading volumes across all digital assets also peaked in May, largely driven by anticipation of the Ether ETFs launch.
Notably, the week of July 22 saw a record-breaking inflow of $14.8 billion, spurred by the debut of the Ether ETFs. However, despite the impressive inflows, digital asset investment products recorded a more modest $245 million in inflows.
Grayscale’s Mixed Performance
Grayscale’s Ethereum Trust ETF witnessed significant outflows, totaling over $1.5 billion since the launch of the spot Ether ETFs in the US on July 23. On July 26 alone, the trust experienced net outflows of $356 million, highlighting a volatile period for the ETF.
Conversely, Grayscale’s Ethereum Mini Trust ETF showed positive performance, recording a net inflow of $44.9 million on July 26. This brought the total net inflows for the Mini Trust to $164 million since its inception.
Competitive Landscape and Market Context
In the competitive landscape, BlackRock’s iShares Ethereum Trust ETF (ETHA) has garnered substantial investor interest. On July 26, ETHA recorded a net inflow of $87.2 million, bringing its total net inflows to $442 million. This positions ETHA as a significant player in the Ethereum ETF market.
As of now, the total net asset value of spot Ether ETFs stands at $9.2 billion. The ETF net asset ratio, representing ETFs’ market value relative to Ethereum’s total market value, is at 2.36%. Despite these impressive figures, the historical cumulative net outflow for spot Ether ETFs has reached $341 million.
On July 23, eight investment firms introduced nine new Ethereum exchange-traded funds, tracking the cryptocurrency’s spot price following their approval by the US Securities and Exchange Commission in May. This launch marks a pivotal moment for Ethereum-based financial products and the broader digital asset market.
Editorial credit: gopixa / Shutterstock.com
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