Cathie Wood Sells Ethereum Futures ETFs, Bearish Signal For Spot ETFs?

by

As a seasoned crypto investor with over a decade of market experience under my belt, I find Cathie Wood’s recent move to offload Ethereum futures ETFs intriguing. While her purchase of Robinhood and Coinbase stocks shows a bullish stance on the broader crypto market, it’s hard not to interpret this as a bearish outlook for Ethereum ETPs in the short term.

On August 9th, Cathie Wood’s Ark Invest sold large amounts of Ethereum futures ETFs within the crypto market. This action could indicate a pessimistic view on Ethereum exchange-traded products (ETPs). Furthermore, it mirrors a growing skepticism among investors as Ethereum spot ETF outflows increase significantly.

Cathie Wood’s Ark Invest Dumps Ether Futures ETF

400 shares of both the Ark Active Ethereum Futures Strategy ETF (ARKZ) and the ProShares Ethereum Strategy ETF (EETH) were sold off by Ark Invest. The sale for ARKZ came up to a total value of $12,056, while the deal with EETH amounted to $21,112.

As an analyst, I find it noteworthy that the figures show a minor sell-off on Ark Invest’s part regarding Ethereum ETPs. This action could hint at a strategic shift in their positioning, possibly indicating diminished short-term confidence in Ethereum. However, Ark Invest’s recent moves toward crypto stocks suggest a more optimistic outlook, underscoring their bullish sentiment towards the broader crypto market.

On the 7th of August, the company bought 145,420 shares from Robinhood Markets Inc. (HOOD), investing approximately $2.4 million. This move was made as the market indicated signs of recovery. Notably, this purchase occurred before the release of Robinhood’s earnings report, with the stock closing at $17.12 on that specific trading day.

Furthermore, it’s worth noting that Ark Invest acquired 13,833 shares of Coinbase Global Inc. (COIN). This action indicates a favorable view, as the value increased by 2% after a stretch marked by economic slowdown concerns. It’s also noteworthy that under the guidance of Cathie Wood, the firm purchased both HOOD and COIN stocks during the market downturn.

A Look At Ethereum ETF Market

In the wake of Cathie Wood’s selling off Ethereum futures ETF, the overall Ethereum market has displayed conflicting trends over the past few days. On August 9 specifically, there was a net outflow of approximately $15.8 million from spot Ethereum ETFs. Yet, the weekly total still showed a positive trend of $104.8 million, suggesting a blend of optimistic and pessimistic views within the market.

Last Friday, BlackRock’s Ethereum ETF attracted investments worth approximately $19.6 million. In comparison, Fidelity’s FETH had more restrained inflows amounting to $3.9 million. Conversely, Grayscale’s ETHE recorded significant outflows totaling $41.7 million.

Currently, Ethereum’s price has been quite steady, moving around the range of $2,550 to $2,650. However, recent market trends hint at a possible change in investor sentiment. Notably, QCP Capital’s analysis indicates a significant shift in liquidity patterns between Bitcoin (BTC) and Ethereum.

Bitcoin Vs. Ethereum

Based on QCP’s recent Weekend Summary, it seems that Bitcoin (BTC) is moving towards mainstream financial markets more and more, while Ethereum (ETH) appears to be losing some ground. This trend could be due to the lower demand for Ethereum ETFs compared to Bitcoin ETFs. QCP Capital suggests that Bitcoin is viewed as a digital equivalent of gold, which has attracted institutional investors. Unfortunately, Ethereum doesn’t seem to have an equally compelling narrative at this time.

On August 5th, it was clear that ETH had a significant drop of 22%, contrasted with BTC‘s 16% decrease. This difference highlights a prevailing pattern where BTC is preferred for its stability and widespread acceptance, while Ether is often viewed as a more speculative asset with greater volatility.

The analysis in the report further noted a substantial increase in the gap between the estimated volatility of Bitcoin (BTC) and Ethereum (ETH). Previously, this gap was roughly 5%, but it’s now grown to nearly 20%. This could indicate that investors are adjusting their tactics, potentially offloading Bitcoin volatility while simultaneously purchasing Ethereum volatility.

Even though some signs point to a bearish trend for ETH prices, QCP Capital’s analysis reveals that the heightened volatility could offer chances for substantial profits. At the same time, it warns of possible bigger declines. On the other hand, the robust and long-term bullish sentiment towards BTC is underscored by a steady appetite for Bitcoin call options maturing in 2025 at around $100,000 levels.

Read More

2024-08-10 12:47