As a seasoned crypto investor who has weathered countless market cycles and witnessed the rise and fall of numerous digital assets, I must admit that the recent performance of Ethereum ETFs has left me somewhat perplexed. Having closely followed the development of these products since their initial proposal, I was optimistic about their potential to bring mainstream institutional investment into the Ethereum ecosystem. However, the relentless outflows from Grayscale’s ETHE have been a stark reminder that the crypto market is anything but predictable.
Recently, banking titan JPMorgan expressed its observation about the less-than-impressive operation of Ether spot Exchange-Traded Funds (ETFs) in the U.S., attributing it to substantial withdrawals from Grayscale’s ETHE. In simpler terms, they noted that these ETFs haven’t been performing well as expected due to larger than anticipated redemptions from Grayscale’s Ethereum product.
These products have suffered from roughly $500 million worth of outflows since their launch.
According to U.Today’s report, JPMorgan anticipates that Ethereum ETFs may not succeed, despite optimistic forecasts from cryptocurrency-focused companies. However, the ongoing redemptions observed in the ETHE fund were unexpected, even for this banking institution.
In July, long-awaited Ethereum ETFs were launched following the surprising approval by the U.S. Securities and Exchange Commission in June.
Regrettably for the bulls, these investments experienced withdrawals on their second day of trading because of the continuous decrease (bleeding) in Grayscale’s holdings.
The leading crypto asset manager also launched a mini-version of its recently converted Ethereum trust. However, it only managed to attract a modest $200 million worth of inflows.
Due to a low interest in Ethereum Exchange-Traded Funds (ETFs), financial institutions are investigating composite ETFs, which blend Bitcoin and Ethereum, as per JPMorgan’s report.
Breaking the outflow streak
On August 28th, for the first time in nine days, Ethereum ETFs experienced inflows instead of outflows, amounting to approximately $5.8 million.
Expectedly, BlackRock’s ETHA led the way with $8.3 million worth of inflows.
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2024-08-29 11:22