Ethereum ETFs on track to take in $15bn in 18 months after ‘very solid first day’

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Spot Ethereum exchange-traded funds put on a solid performance on their first day.

The ETFs, launched on Tuesday, outperformed expectations by netting $107 million on their initial day despite heavy outflows from one of Grayscale Investments’ funds.

“Great setup for the road ahead,” Juan Leon, senior investment strategist at crypto index fund manager Bitwise, posted on X.

Ethereum ETFs could take in $15 billion in assets within the next 18 months, Bitwise chief investment officer Matt Hougan argued in a June blog post.

That prediction seems realistic considering the funds’ performance on Tuesday, Leon said.

Inflows and outflows

Not all Ethereum ETFs are the same.

Seven funds — issued by BlackRock, Fidelity Investments, VanEck, Invesco and Galaxy Digital, 21Shares, Franklin Templeton, and Bitwise — were created from scratch on Tuesday.

Grayscale Investments, meanwhile, converted its existing Ethereum trust — called ETHE — into an ETF and spun up a second, cheaper fund called the mini Ethereum ETF.

Launched in 2017, ETHE was designed in such a way that its shares could only be created, not redeemed. Nevertheless, the trust accumulated $10 billion before it was converted into an ETF.

The conversion now allows investors to exit the fund at any time.

While the eight new ETFs took in $590 million on Tuesday, Grayscale’s ETHE bled out almost $485 million, per Bloomberg data.

“Damn. That’s a lot. Like 5% of the fund,” Bloomberg Intelligence ETF analyst Eric Balchunas posted on X.

“Not sure the eight [new funds] can offset [outflows] of this magnitude,” he added. “On the flip side, maybe it’s best to just get it over with fast, like ripping a bandaid off.”

The most successful of the funds was BlackRock’s, which took in $266 million, followed by Bitwise’s, which grabbed $204 million.

“Very solid first day,” Bloomberg Intelligence ETF analyst James Seyffart posted on X.

Balchunas, for his part, said the ETF haul was “huge.”

BlackRock’s and Fidelity’s Ethereum ETFs, for example, experienced the two biggest launches in terms of trading volume out of 600 ETF launches in the last 12 months — that is, excluding the spot Bitcoin ETFs launched in January.

Overall, Ethereum ETFs processed $1 billion in trading volume on Tuesday, about 23% of what Bitcoin ETFs processed on their first day, according to Balchunas. BlackRock’s Ethereum fund had about 25% of its Bitcoin fund’s volume.