Ether ETFs Make Strong Debut, Led by BlackRock, Bitwise, and Fidelity, Amidst $484 Million Outflow from Grayscale

BlackRock, Bitwise Investments, and Fidelity have taken the lead in the US exchange-traded funds (ETFs) that focus on ether, the second-largest cryptocurrency after Bitcoin. On their first trading day, these funds saw impressive inflows with BlackRock’s ETF bringing in about $267 million, Bitwise’s $204 million, and Fidelity’s $71 million. In contrast, Grayscale Investments faced a significant outflow of around $484 million from its established fund. The introduction of nine new ETFs for ether contributed to a total trading volume of approximately $1.1 billion, with the ETF funds collectively attracting around $108 million.

While the debut of ether ETFs marked a notable moment for the cryptocurrency market, it fell short of the extraordinary showing of bitcoin ETFs, which raised around $655 million on their first day. Experts suggest that ether’s market presence and narrative differ significantly from those of bitcoin, making it less popular among investors. As of now, bitcoin’s market cap stands at $1.3 trillion, overshadowing ether’s $412 billion. Ethereum is recognized as a platform for creating new crypto projects, with ether holders having the potential to earn returns by staking their tokens. However, regulatory concerns limit ETF issuers from participating in staking, complicating the investment landscape for ether.

Looking ahead, analysts moderately expect the ether ETFs to gather about $3.5 billion over the next six months, although estimates vary widely. This is a stark contrast to the bitcoin ETFs, which have secured more than $17 billion in funding since their launch in January. Despite the contrasting inflows, researchers and industry leaders acknowledge the significance of ether ETFs as a step forward for the crypto sector’s integration into traditional finance. The performance of both bitcoin and ether has seen growth recently, with increases of around 50% and 45%, respectively, since the start of 2024.