Crypto: The Net Outflows Of Ether ETFs Worry Analysts

Crypto ETFs continue to make headlines. While Bitcoin ETFs have quickly gained popularity, Ether ETFs are struggling to convince. They have recorded net outflows of 500 million dollars since their inception. An alarming figure for investors!

Some relevant points here in that:

1) Grayscale outflow was larger than anticipated

2) @ethereum may not have the pulling power for TradFi of a combined $BTC + $ETH ETF

However, it seems more like Grayscale failing than the ETH ETF. Cumulative inflow of the other ETFs is ~$2b pic.twitter.com/jyffHfb3JA

— CryptoDataTalk (@CryptoDataTalk) August 29, 2024

Crypto: Ethereum ETFs have lost 500 million in 5 weeks

Since their launch in the United States, Ethereum ETFs have had a rough start. These new crypto assets have indeed recorded net outflows of 500 million dollars. In comparison, Bitcoin ETFs attracted over 5 billion dollars in the first 5 weeks. This stark contrast highlights a significant difference in enthusiasm between the two crypto assets.

According to JPMorgan’s research team, led by Nikolaos Panigirtzoglou:

“The first-mover advantage for Bitcoin played a crucial role. Bitcoin, being the first cryptocurrency to have a spot ETF, naturally captured the attention of institutional investors.”

Grayscale facing colossal losses

Grayscale’s crypto ETF, the ETHE, has been particularly hit by this trend. Indeed, the fund’s net outflows have reached 2.5 billion dollars. This figure is well above JPMorgan’s initial expectations, which anticipated outflows of about 1 billion dollars.

Certainly, Grayscale launched a mini Ether crypto ETF. But despite this initiative, the fund attracted only 200 million dollars in inflows. This disappointing result shows that investors’ appetite for Ethereum crypto remains limited.

Towards a combined Bitcoin and Ether crypto ETF?

JPMorgan notes that more and more applications are being submitted for the creation of a combined crypto ETF offering exposure to both Bitcoin and Ethereum.

Combined ETFs could meet a dual demand:

• that of institutional investors seeking to diversify their assets;
• that of individuals attracted by the promise of high returns.

If this trend is confirmed, it could reshape the landscape of crypto ETFs. But not only that! It would also offer a new opportunity for Ethereum to regain ground against Bitcoin.

The coming months will be decisive in observing how these trends develop and influence crypto investors’ strategies.