Spot Ethereum exchange-traded funds (ETFs) in the United States have experienced their first week of positive net inflows since their launch on July 23. According to ETF tracker SoSoValue, Ether ETF weekly flow spiked as the nine newly launched US spot Ether ETFs saw a positive overall net inflow of $104.8 million for the week beginning August 5.
Investors Confidence Grows Amidst Price Volatility
This Ether ETF weekly flow marks a significant milestone for the industry, demonstrating investor confidence in the asset class despite a recent price dump. “The Ether ETF weekly flow is a testament to the growing demand for Ethereum exposure in traditional investment portfolios,” said Eric Balchunas, Senior ETF Analyst at Bloomberg. “Investors are looking for ways to tap into the potential of Ethereum, and ETFs are providing an accessible and regulated means to do so.” The inflow figure comes amid a challenging period for the underlying asset, Ether (ETH), which has declined 23% since the beginning of August.
A Surprising Turn of Events
However, six of the nine funds had overall positive net flows for the week, with BlackRock’s iShares Ethereum Trust (ETHA) leading the pack with $188.4 million. “BlackRock’s iShares Ethereum Trust has been a standout performer in the Ether ETF space, with a strong weekly flow of $188.4 million,” said Todd Rosenbluth, Head of Research at VettaFi.
“This demonstrates investor confidence in the fund’s ability to track the price of Ethereum.” The BlackRock fund has now amassed over $900 million in just 13 days of trading and has yet to experience an outflow day. Its closest rival, the Fidelity Ethereum Fund (FETH), had $44.65 million in inflows last week, bringing its total to $342 million.
“The Ether ETF weekly flow is a key indicator of investor sentiment, and the recent inflows suggest a growing appetite for Ethereum exposure,” said Dave Nadig, Chief Investment Officer at ETF Trends.
The other four ETFs with aggregate inflows last week were Grayscale’s Mini Ethereum Trust (ETH) with $19.8 million, the VanEck Ethereum ETF (ETHV) with $16.6 million, the Bitwise Ethereum ETF (ETHW) with $11.7 million, and the Franklin Ethereum ETF (EZET) with $3.7 million in inflows for the week.
However, not all funds experienced positive flows. Grayscale’s Ethereum Trust (ETHE) lost $180 million in outflows over the week, resulting in an overall outflow of $406.4 million for all nine funds, according to Farside Investors. “Grayscale’s Ethereum Trust has been experiencing outflows, which is likely due to the fund’s structure and fees,” said Balchunas. “However, the overall Ether ETF weekly flow remains positive, indicating a growing demand for Ethereum exposure.” Meanwhile, ETF issuers are angling to get options products launched for their spot ETH funds. On August 7, the NYSE American LLC proposed a rule change that would allow it to list and trade options contracts for three ETH ETFs from Grayscale and Bitwise.
Options on The Horizon
“The ability to trade options on Ether ETFs will provide investors with additional tools to manage risk and gain exposure to Ethereum,” said Rosenbluth. Meanwhile, ETF issuers are angling to get options products launched for their spot ETH funds. On August 7, the NYSE American LLC proposed a rule change that would allow it to list and trade options contracts for three ETH ETFs from Grayscale and Bitwise.
“This is a positive development for the industry and demonstrates the growing maturity of the Ether ETF market.” Ether (ETH), which has declined 23% since the beginning of August has since been unstable due to market condition.
The Ether ETF weekly flow has hit a record high despite a price dump in Ether, demonstrating investor confidence in the asset class. As the industry continues to evolve, it’s likely that we’ll see further innovation and growth in the Ether ETF space.
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