Original | Odaily Planet Daily
Author | jk
With the launch of the US spot Ethereum ETF, the cryptocurrency investment market has once again experienced new changes. The performance of the US spot Ethereum ETF varied in the past week. This new batch of ETFs saw a net inflow of over $1 billion in the first week, while Grayscale's ETHE saw a net outflow of $1.5 billion.
In this article, Odaily Planet Daily will analyze the performance of these new ETFs in detail, discuss the key factors affecting market trends, and look ahead to possible future development trends.
Spot Ethereum ETF
After obtaining approval from the US Securities and Exchange Commission in May, spot Ethereum ETFs from eight issuers were officially launched last Tuesday. As of July 29th local time in the US, the total trading volume of spot Ethereum reached $4.83 billion.
Since the launch of spot Ethereum, the trading volume of the top-ranked ETHA from BlackRock among the eight new ETFs has consistently been the highest, with a trading volume of $1.104 billion and a net inflow of $500 million, maintaining a market share of around 21%. Fidelity's FETH saw a net inflow of $244.2 million, but its market share dropped from around 12% at the time of launch last Tuesday to 5% today. Due to the lowest management fee, Grayscale's Mini Trust (ETH) saw its market share increase from 5% to 13.6%.
In contrast, Grayscale's ETHE saw a net outflow of over $1.5 billion due to reasons similar to GBTC (which had been trading at a discount and had high management fees), resulting in an overall net outflow of $341.8 million for the US spot Ethereum ETF.
Net inflow and outflow of spot Ethereum overall, source: The Block
Comparison with Bitcoin ETF
In terms of trading volume, it is clear that the spot Bitcoin and Ethereum ETFs are incomparable (the spot Bitcoin ETF had a trading volume of $4.5 billion on the first day, which is almost the trading volume of the spot Ethereum ETF for a week). However, according to The Block's analysis, excluding ETHE, the net inflow of the Ethereum ETF is approximately 40% of the net inflow of the Bitcoin ETF in January (excluding GBTC), with $1.17 billion compared to $2.89 billion.
The spot Ethereum ETF also quickly surpassed the trading volume of existing Ethereum futures ETF products, occupying 99.3% of the market share as of last Friday, according to The Block's data.
In comparison, the spot Bitcoin ETF accounted for 92.75% of the trading volume market share of the Bitcoin futures ETF.
Similar to GBTC: Will Grayscale Sell Off?
The Grayscale Ethereum Trust Fund was initially launched in 2017 and began trading in mid-2019 with the code ETHE. This situation continued until July 23rd, when ETHE became one of the newly approved spot Ethereum ETFs. The fees after the conversion of ETHE are much higher, at 2.5%, similar to the situation with Grayscale's GBTC Trust Fund conversion to Bitcoin spot ETF. Some investors who had previously purchased trust shares at a significant discount during the bear market (trust shares cannot be redeemed) wanted to sell and secure profits after the conversion to ETF; while other investors sold due to the high management fees and chose other new ETFs.
The fees for spot Ethereum ETFs from other issuers were reduced to between 0.19% and 0.25% after deductions. However, in Grayscale's dual ETF strategy, its other Grayscale Mini Trust Ethereum ETF product (ETH) has the lowest fee, at only 0.15%. This product saw a net inflow last week, totaling $164 million, and its market share increased from 5% to 13.6%. However, due to the significant net outflow of ETHE and the decline in the price of Ethereum since the ETF's launch, its managed assets decreased to approximately $7.5 billion (2.28 million Ethereum).
According to The Block, Bloomberg ETF analyst James Seyffart stated, "For me, the main difference is the significant net outflow of ETHE. I don't think GBTC had this situation on the first day because there was still a significant discount when it was launched."
"‘The new eight’ Ethereum ETFs are not as strong as ‘the new nine’ Bitcoin ETFs in offsetting Grayscale's net outflow, but the good news is that their net inflow/trading volume is still very healthy. The unlocking strength of ETHE is much faster than GBTC = good prospects, but the next few days may be challenging," added Bloomberg ETF analyst Eric Balchunas.
ETH price. Source: Coinmarketcap
The price of Ethereum did not change dramatically over the past week, dropping from over $3400 to around $3100, then rising to around $3300. This also indicates that the so-called selling pressure did not actually result in the sale of ETH, or the selling pressure was effectively absorbed.
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