Spot Ethereum ETFs in the U.S. have shown resilience in the face of their Bitcoin counterparts' recent challenges. The Ethereum funds recorded a total net inflow of $5.8 million yesterday and marked their first positive day after nine consecutive trading days of outflows.
This uptick comes at a time when Bitcoin spot ETFs are experiencing significant outflows.
On Wednesday, Bitcoin ETFs saw a total net outflow of $105 million, with major players like Grayscale (GBTC) and ARK Invest's (ARKB) funds bearing the brunt of the exodus, according to data from SoSo Value.
Breaking down the Ethereum ETF performance, BlackRock's (ETHA) led the charge with an inflow of $8.4 million, followed by Fidelity's (FETH), which attracted $1.3 million. However, it wasn't all positive news, as Grayscale's ETHE continued to face challenges with an outflow of $3.8 million, data shows.
While Bitcoin ETFs have generally seen stronger demand since their launch, Ethereum's recent positive flow is suggestive of growing interest in the second-largest cryptocurrency by market cap.
Industry analysts have pointed out that the timing of these ETF launches plays a crucial role in their performance.
Ethereum ETFs debuted during the typically slower summer months, which may have impacted initial investor enthusiasm.
Despite this, the recent inflow indicates a potential shift in investor sentiment.
In a note sent to Decrypt, Matteo Greco, Research Analyst at Fineqia International, noted that the contrast between Bitcoin and Ethereum ETFs is stark. Just last week, Bitcoin ETFs recorded $500 million in net inflows, bolstered by a 9.9% rise in BTC’s price.
“Trading activity also remained robust, with BTC spot ETFs trading approximately $7.6 billion over the past week, confirming trading volumes not seen since April. This contrasts with the typically quieter trading periods in Q3, particularly in July and August, and shows strong demand for BTC,” Greco stated in his note.
Conversely, Ethereum ETFs have struggled, with outflows totaling $43 million last week and an additional $13 million on August 26, despite an uptick in ETH’s price.
Pointing out the challenges Ethereum ETFs face, K33 Research analysts wrote that since their launch, Ethereum ETFs have seen net outflows of 196,652 ETH, with 17 of their first 25 trading days ending in outflows.
This is in stark contrast to Bitcoin ETFs, which only saw 6 of their first 25 days result in outflows.
“The timing of the two launches matters, with ETH ETFs launching amidst the summer doldrums and the summer holiday effect subduing market activity. Nonetheless, the significant lag in performance is remarkable, and for now, the conversion has been more of a curse than a blessing for ETH as the Grayscale conversion has flooded the market with supply,” K33 research stated.
Edited by Stacy Elliott.