Ethereum is following Bitcoin’s trajectory but cumulative ETF outflows near $500M

Investors cannot miss the similarities between Ethereum’s current price movement to Bitcoin after the approval of its ETFs. Crypto commentator Croissant noted that Bitcoin experienced an immediate drop following the ETF approval, only to witness a price surge after a couple of months down the line.

The observation comes a week after the US Securities and Exchange Commission (SEC) approved the trading of nine Ethereum ETFs. After trading commenced on July 23, Grayscale’s ETHE fund is weighing on the overall market. Contrarily, the asset manager’s ETH fund is performing in line with the rest of the players. As Ethereum ETFs enter week 2 of trading, there are learnings from the week gone by.

Ethereum could be following the Bitcoin trajectory

Crypto influencer Croissant pointed out on X that Ethereum’s price movement could be mirroring Bitcoin. The crypto commentator noted that after Bitcoin ETF  was approved, BTC saw an immediate drop. He underlined that Bitcoin’s price dropped by 8% within two days and by 20% within the first two weeks. Croissant suggests that Ethereum might see a similar decline but BTC surged almost 90% within months.

ethereum is following the exact same trajectory as bitcoin after the etf was approved… 👀

-8% ($3143) two days after approval

-20% ($2749) two weeks after approval

+90% ($6547) two months after approval pic.twitter.com/tS5ZKqyGQh

— croissant (@CroissantEth) July 25, 2024

The SEC approved the trading of eight new Ethereum ETFs along with the conversion of one Grayscale fund. The trading began on July 23, almost six months after their Bitcoin counterpart. During the week ending July 30, Ethereum is around 6% down as per data by CoinGecko. Contrarily, in four days after the Ethereum ETFs began trading, Bloomberg recorded $1.17 billion in flows on July 26.

Cumulative flows weighted by Grayscale

On July 29, the spot Ethereum ETFs’ cumulative net outflow was nearing $500 million. On the day, the exchange-traded funds surpassed $98 million in outflows, according to SoSoValue. This is in contrast to Bitcoin ETFs recording cumulative inflows to the north of $17 billion on July 29. The day’s net inflow also touched $124 million.

Notably, Ethereum ETFs were mainly weighed down by outflows from Grayscale’s Ethereum Trust (ETHE). The ETF trading price was lower or trading at a discount of 0.17% to its net asset value (NAV) at press time. However, Grayscale Ethereum Mini Trust (ETH) did not disappoint and saw net inflows of $4.9 million. In the Bitcoin ETF lot, Grayscale’s GBTC was the only fund to have negative cumulative net inflows of around $19 billion.

First week concluded with challenges

From July 23-29, all US ETH ETFs saw positive flows except Grayscale’s ETHE. As per data by Farside, the funds received a seed inflow of $10,255 million, followed by a positive day 1 of trading at a cumulative $106.6 million. All other days experienced cumulative outflows from ETHE despite the positive performance of the rest of the players.

Analysts believe that the 2.5% fees for ETHE could be a major pain factor. ETHE investors are facing the highest potential expense when fee range by competitors remains between 0.15% to 0.25%. Grayscale’s ETH fund also debuted with a lower 0.15% fee and attracted $168.9  million in inflows until now.

First week of the ETH ETF is done with the final net flow number being -$341 million (due to ETHE outflows of course).

As for inflows – the ETH ETF saw a massive $1.17bil in its first week with BlackRock, Fidelity and Bitwise leading the charge.

Onto week 2 soon! pic.twitter.com/GSymQfAaXI

— sassal.eth/acc 🦇🔊 (@sassal0x) July 27, 2024

At the time of writing, BlackRock’s iShares Ethereum Trust (ETHA) attracted $500 million in cumulative net inflows during its first five days of trading, followed by Bitwise’s Ethereum ETF (ETHW) with $276 million and Fidelity’s FETH with $244 million. VanEck’s ETHV, Franklin Templeton’s EZET, Invesco’s QETH, and 21Shares’ CETH recorded net inflows of $46 million, $25.8 million, $14 million, and $7.5 million respectively.

Notably, CETH and QETH witnessed zero flows on July 29.

If we were to compare the first week days of trading of the US spot Bitcoin ETFs launched in January, investors traded $13.9 billion with the asset class. Despite this comparative shortfall, ETH continues its annual rise of over 70%, holding its place as the second-largest cryptocurrency after Bitcoin.

Meanwhile, Senior crypto analyst Mads Eberhardt estimates that the ETHE outflows can ease as the fund enters week 2 of trading.