- Ethereum ETFs start strong but lag behind the epic Bitcoin ETF launch in terms of inflows on the first day of trading
- Analysts worry that Ethereum will prove to be a harder sell than Bitcoin to traditional investors due to its more complex value proposition
- Three Ethereum ETFs – iShares Ethereum Trust ETF, Bitwise Ethereum ETF, and Fidelity Ethereum Fund – led the inflows, attracting a combined $541 million on the first day
Ethereum exchange-traded funds (ETFs) debuted last week, marking a milestone for the cryptocurrency ecosystem. While the ETFs attracted significant inflows, they fell short of the epic launch of Bitcoin’s first spot ETF back in January.
Ethereum ETF Inflows Solid But Smaller Than Bitcoin’s
The new spot ETH ETFs brought in around $100 million on their first day of trading, according to analysts. This represents 10-20% of the inflows seen by Bitcoin’s ETF on its opening day earlier this year.
Bitcoin’s ETF launch set “new standards as the most successful ETF launch in financial history,” said Adrian Fritz of crypto ETF issuer 21Shares. He expects institutional interest in Ethereum to grow over time, even though its value proposition is more complex than Bitcoin’s narrative as a store of value.
Morningstar analyst Bryan Armour estimates the new Ethereum ETFs will attract $1-2 billion in assets under management over the next three months. Bitcoin’s ETFs brought in $17 billion over a similar timeframe, putting Ethereum on pace for 10-15% of Bitcoin’s debut inflows.
BlackRock, Fidelity ETFs Lead Charge
The Ethereum ETFs from BlackRock, Fidelity, and Bitwise captured the majority of opening day inflows.
BlackRock’s size and distribution network allowed its ETF to raise $266 million on day one. Fidelity saw $204 million in inflows, while Bitwise garnered $71 million thanks to its popularity among crypto-focused retail investors.
These inflows were partially offset by outflows totaling $484 million from Grayscale’s Ethereum Trust (ETHE). Still, total inflows into the eight new Ethereum ETFs exceeded $590 million.
Volatility Declines Post-Launch
Ahead of the ETF launch, Ethereum options markets priced in uncertainty around potential inflows. Once trading began, volatility declined as markets grew confident inflows would provide stability.
The Ethereum Volmex Implied Volatility index dropped 4 points to around 65 after the first day of ETF trading. This signals the market believes ETF demand will have a stabilizing impact on Ethereum spot prices.
Conclusion
While Ethereum ETFs didn’t quite match Bitcoin’s explosive debut, the funds attracted significant investment on day one. Analysts believe institutional interest will continue growing as investors become more familiar with Ethereum’s value proposition. If inflows remain strong, the ETFs could provide an on-ramp for larger institutional adoption of the asset.
