2024 has proven to be an eventful year for the cryptocurrency industry, with significant developments in the Ethereum ecosystem. The US Securities and Exchange Commission’s approval of almost ten exchange-traded funds tracking Ethereum’s performance provided a massive validation for the second-largest digital asset. Although the ETH ETFs were greenlighted a few months prior, they were officially launched on US stock exchanges on July 23.
The first trading day of these ETFs saw substantial volumes and $106.6 million in total inflows. However, this positive start was marred by significant outflows from Grayscale’s converted fund (ETHE), totaling $484.1 million. This resulted in other ETFs such as BlackRock’s ETHA and Bitwise’s ETHW stepping in to offset Grayscale’s losses with inflows of $266.5 million and $204 million, respectively. Despite this initial balance, the subsequent days saw a turn in the tides.
Data from FarSide indicates that Grayscale’s ETHE continued to experience significant outflows, with $326.9 million on July 24, $346.2 million on July 25, and $356.3 million on July 26. The total outflows for these days amounted to $133.3 million, $152.4 million, and $162.7 million, respectively. What is particularly worrying is that the withdrawn funds are on an upward trend, signaling continued selling pressure on the ETFs.
Despite the challenges faced by the Ethereum ETFs, there is a silver lining for the underlying asset. Ethereum managed to recover most of the losses incurred earlier in the week when its price dropped from $3,500 to $3,000 in a matter of hours due to the ETF outflows. As of the latest data, ether is trading close to $3,300, showing resilience in the face of market volatility.
While the initial excitement surrounding Ethereum ETFs has been met with challenges in the form of sustained outflows, the underlying asset has demonstrated its ability to weather the storm. The coming days will be crucial in determining the trajectory of Ethereum ETFs and their impact on the broader cryptocurrency market.
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