- The outflows of almost $1.5 billion from Grayscale’s high-priced Ethereum Trust exceeded the inflows into the other spot products.
Exchange-traded funds that track spot ether (ETH) experienced negative net flows during their first week of operation due to significant withdrawals from the market leader, Grayscale Ethereum Trust (ETHE), outpacing demand for the rival products.
Comparable bitcoin (BTC) funds made their debut in January and after the first four days of operation, they managed to attract $1 billion in net inflows, despite experiencing significant withdrawals from an earlier Grayscale fund.
Over $1.5 billion left the Grayscale Trust as a result of net withdrawals of $340 million from the spot ETH ETFs, according to Farside Investors.
The poor performance of the ETFs appeared to be reflected in the price action, with bitcoin rising 2% and ether falling 5% last week.
Putting aside Grayscale’s ETHE, $1.15 billion was invested in the other recently announced ether ETF products last week, with BlackRock, Bitwise, and Fidelity leading the way.
Analysts predict that the present rate of ETHE withdrawals could begin to taper off as early as this week, even though it would mean the fund will run out of assets in the next four weeks.
The founder of digital asset hedge firm Lekker Capital, Quinn Thompson, noted that during the post-ETF sell-off that saw bitcoin reach a local low in late January, ETHE had already lost as much asset value as GBTC. In just two weeks, Bitcoin dropped 15% to under $39,000 before surging to all-time highs.
Senior crypto analyst at Steno Research Mads Eberhardt observed that following the eleventh trading session, GBTC outflows considerably decreased and forecast that ETHE would take a similar course.
Although the net outflow from the Ethereum ETF has not yet stopped, Eberhard stated in a Monday X post that it is most likely to happen this week. When it happens, he remarked, it’s all up from there.
Disclaimer : This article was created for informational purposes only and should not be taken as investment advice. An asset’s past performance does not predict its future returns. Before making an investment, please conduct your own research, as digital assets like cryptocurrencies are highly risky and volatile financial instruments.
