Nine spot ether exchange-traded funds (ETFs) began trading on major stock exchanges on Tuesday, yet their arrival failed to ignite significant gains in the cryptocurrency markets. Ether (ETH), the native cryptocurrency of the Ethereum blockchain, saw a modest decline of less than 1%, hovering around $3,400 as of 1:30 p.m. ET. Similarly, Bitcoin (BTC) experienced a drop of more than 2%, trading around $66,000.
Ether ETFs’ Underwhelming Launch
The launch of spot ether ETFs commenced with approximately $10 billion in assets under management (AUM), as reported by Bloomberg Intelligence analyst James Seyffart. This sum predominantly includes assets from the Grayscale Ethereum Trust (ETHE), which has been converted into an ETF.
Kaiko Research highlighted concerns about ETHE’s high fees, noting that the fund’s 2.5% fee could lead to potential outflows. This situation mirrors the challenges faced by Grayscale’s Bitcoin Trust (GBTC) following the introduction of spot bitcoin ETFs in January, due to the high fees associated with the original funds. In contrast, the new ether ETFs feature significantly lower fees, with a “mini” ether ETF charging 0.15% and other ETFs priced at 0.25% or less. These fee discrepancies may impact ether’s price and overall market sentiment.
Jupiter Zheng of Hashkey Capital cautioned that outflows from Grayscale’s Ether Trust could temporarily dampen market sentiment following the ETFs’ launch.
Grayscale’s Optimistic View
Despite the subdued reception compared to January’s enthusiastic launch of spot Bitcoin ETPs, Grayscale remains hopeful. Zach Pandl, Grayscale’s Head of Research, suggested that the introduction of Ethereum ETPs might be underestimated by investors, especially given the evolving US political landscape on crypto and growing institutional interest in tokenization.
Bitcoin ETFs See Continued Success
In contrast, the appetite for spot bitcoin ETFs remains robust. BlackRock’s iShares Bitcoin Trust (IBIT) recorded its sixth-largest daily inflow of $526.7 million on Monday, according to data from Farside Investors. Daily inflows for the broader spot bitcoin ETF market also reached their highest levels since June 5.
Franklin Templeton, which has launched both bitcoin and ether ETFs, appears to be strategically diversifying. The firm is investing in Bitlayer, a solution for implementing Ethereum’s technology on a second-layer Bitcoin network, as reported by CoinDesk.
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