Ether spot exchange-traded funds (ETFs) have experienced net outflows since their launch last month, a stark contrast to the successful debut of spot Bitcoin ETFs earlier this year, according to a JPMorgan research report released on Wednesday.
The ether ETFs began trading in the U.S. on July 23, approximately six months after the launch of the Bitcoin ETFs. In the five weeks following each fund’s introduction, ether ETFs saw net outflows totaling around $500 million, while Bitcoin ETFs experienced net inflows exceeding $5 billion, the bank’s analysts reported.
JPMorgan noted that the underwhelming performance of ether ETFs was somewhat anticipated. The report highlighted Bitcoin’s “first-mover advantage,” the absence of staking options, and lower liquidity, which makes ether less attractive to institutional investors.
However, JPMorgan was surprised by the $2.5 billion outflow from Grayscale’s Ethereum Trust (ETHE). The bank had expected outflows closer to $1 billion as the fund transitioned from a closed-end structure to a spot ETF. In response to these outflows, Grayscale launched a smaller ether ETF, but it has only attracted $200 million in inflows so far.
The report also pointed out a growing interest among asset managers to file for combined ETFs that offer exposure to both Bitcoin and ether, driven by the weaker demand for standalone ether ETFs compared to Bitcoin.
JPMorgan’s research further noted that the ownership structure of spot Bitcoin ETFs has remained largely unchanged from the first quarter, with retail investors holding about 80%. The bank added that most of the new spot Bitcoin ETFs were likely purchased by retail investors, either directly or through investment advisors.
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