Ethereum ETFs Launch in US with $1 Billion First-Day Trading Volume

TLDR

• Spot Ethereum ETFs launched in the US on July 23, 2024, with nine funds trading on their first day.
• The ETFs saw over $1 billion in total trading volume, with BlackRock’s fund leading in inflows.
• Grayscale’s converted Ethereum Trust experienced significant outflows of $484 million.
• The combined net inflow across all funds was $107 million, considered a solid start.
• Ethereum’s price remained relatively stable, showing little immediate reaction to the ETF launch.

On July 23, 2024, the United States saw the launch of its first spot Ethereum exchange-traded funds (ETFs). Nine funds began trading, marking a significant milestone for the world’s second-largest cryptocurrency by market value.

The debut day was marked by high trading volumes, with the combined total exceeding $1 billion across all nine funds. This strong start positions the Ethereum ETFs well, although it didn’t surpass the massive launch seen with Bitcoin ETFs earlier.

BlackRock’s iShares Ethereum Trust ETF (ETHA) emerged as a top performer, recording $266.5 million in inflows on its first day. This impressive showing placed it among the best-performing new ETF launches ever. Bitwise Asset Management’s ETHW fund also saw strong demand, with inflows of $204 million.

However, not all funds experienced the same level of success. Grayscale’s newly converted Ethereum Trust (ETHE) saw significant outflows of $484 million.

UPDATE: First full day of flows for the ETHness stakes are in. The Ethereum ETFs took in $107 million. @BlackRock’s $ETHA lead the way with $266.5 million followed by @BitwiseInvest’s $ETHW with $204 million. Very solid first day pic.twitter.com/j28vIwVWvR

— James Seyffart (@JSeyff) July 24, 2024

This was expected by many analysts, as investors moved to realize profits from the previous premium gap and potentially reallocate to funds with more favorable fee structures. Grayscale’s ETH fee stands at 2.5%, considerably higher than its competitors.

To counter this outflow, Grayscale launched an Ethereum Mini Trust (ETH) with a $1 billion assets under management starter and a more competitive 0.15% fee. This new fund saw an inflow of $15 million on its first trading day.

Despite the substantial outflows from Grayscale, the overall picture for Ethereum ETFs remained positive. The combined net inflow across all funds totaled $107 million, which Bloomberg ETF analyst James Seyffart described as a “very solid first day.”

Other funds saw varying levels of interest. Fidelity’s FETH fund recorded $71 million in inflows, while 21Shares, Invesco, VanEck, and Franklin saw more modest inflows between $7.5 million and $13 million each.

The launch of these ETFs had little immediate impact on Ethereum’s price. The cryptocurrency traded at around $3,430 on July 24, showing only minor fluctuations. This stability contrasts with the significant price movements often seen in the crypto market around major events.

Looking ahead, analysts have diverse predictions for Ethereum’s price movement. Some suggest it may retreat below $3,000 in the short term, while others forecast new all-time highs in the long run as institutional investors gain easier access through these ETFs.

The launch of Ethereum ETFs follows the approval of Bitcoin ETFs earlier in the year. This development marks another step in the integration of cryptocurrencies into traditional financial markets.

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