Ether ETFs see US$340 million outflow in first week of trading

THE nine US exchange-traded funds (ETFs) holding the Ethereum cryptocurrency saw outflows of US$340 million during their first week of trading, as investors pulled money daily from a high-fee legacy product that was converted to an ETF.

The eight new Ether ETFs minted following last week’s approval from the US Securities and Exchange Commission took in US$1.2 billion in the four trading days ended Jul 26, according to data compiled by Bloomberg.

The biggest inflows were seen by funds from BlackRock, Bitwise and Fidelity, which took in US$442 million, US$266 million and US$219 million, respectively. Grayscale’s incumbent Ethereum Trust lost US$1.5 billion.

Investors saw the convergence of Grayscale’s fund as an opportunity to cash out, according to a Monday (Jul 29) report from CoinShares. This is similar to when investors pulled billions of US dollars from the Bitcoin Grayscale Trust when spot ETFs for Bitcoin were launched in January.

In addition to Grayscale converting its existing fund, the firm also launched a “Ethereum Mini Trust” which has a current fee of zero per cent, compared to the trust’s 2.5 per cent. The mini trust brought in US$91 million last week.

The price of Ether has dropped 4.6 per cent to around US$3,331 since the ETFs began trading on Jul 23. The second-biggest cryptocurrency after Bitcoin is up about 46 per cent so far this year. BLOOMBERG