On Thursday, August 23, 9 ETFs holding Ethereum experienced net outflows for the sixth consecutive day, with a total outflow of $1 million
On July 23, the highly anticipated second largest cryptocurrency Ethereum spot ETF was launched in the United States. One month later, investors seem to lack interest.
The debut of cryptocurrency ETFs in the United States is considered a watershed moment for the digital asset industry, which has long been seeking regulatory approval to launch funds tied to Bitcoin and Ethereum. In January, a Bitcoin ETF was launched; in July, eight issuers including BlackRock, Nvidia, and Fidelity Investments finally received approval from the U.S. Securities and Exchange Commission to launch an Ethereum spot ETF.
However, the Ethereum spot ETF does not seem to have gained favor with investors. On Thursday, August 23, for the sixth consecutive day, 9 ETFs holding Ethereum experienced outflows, with the Ethereum spot ETF seeing a net outflow of $1 million, marking the longest continuous withdrawal since the debut of the Ethereum spot ETF on July 23.
Currently, the net outflows of the Ethereum spot ETF amount to approximately $458 million, mainly attributed to the Grayscale Ethereum Trust Fund, which has been experiencing continuous fund withdrawals since its conversion to an ETF.
However, many analysts remain optimistic about the Ethereum spot ETF. Matthew Sigel, Director of Digital Assets Research at VanEck, stated:
"Trading volumes across all venues have collapsed this week, and outflows from the Grayscale Ethereum Trust Fund continue. The overall sentiment and positioning in the market have been reset, and things should improve in September and October."
At the same time, analysts indicate that the recent monetary policy of the Federal Reserve is impacting the trading of the Ethereum spot ETF. Over the past two weeks, market participants have been closely watching the Jackson Hole meeting for more clarity on future monetary policy. Stephane Ouellette, Co-Founder of FRNT Financial, stated:
"I don't think it's surprising that ETF investors reduced their Bitcoin exposure ahead of the Jackson Hole meeting, as they are far less familiar with cryptocurrencies than crypto natives and are cautious when interest rate expectations adjust.
It is important to note that no matter how much money flows out of the Ethereum spot ETF, it represents only a relatively small portion of the market, with these funds accounting for about 2% of Ethereum's market value."
On Friday morning, Powell expressed confidence in the U.S. inflation returning to 2% and clearly hinted at a rate cut in September. After Powell's speech, Ethereum rose by 4% to $2,730.
Compared to Bitcoin ETFs, the launch of Ethereum ETFs has been much more moderate. Two months after the release of Bitcoin ETFs in January, Bitcoin's price soared to record levels. According to Bloomberg Intelligence data, the Bitcoin ETFs issued by BlackRock and Fidelity Investments became the only two funds in the top 20 trading days to attract over $3 billion within the first 20 days As of Thursday, Ethereum ETFs have seen continuous outflows for 6 days, while US ETFs holding Bitcoin have been receiving inflows every day. Noelle Acheson, author of Crypto Is Macro Now newsletter, stated:
"Bitcoin is usually the entry point for investors to enter the cryptocurrency market. Although diversification is becoming more important, Ethereum may eventually catch up with Bitcoin, but for now, Bitcoin is more likely to continue outperforming the market."