Grayscale unlock hindered Ethereum ETFs but inflows suggest brighter future Grayscale unlock hindered Ethereum ETFs but inflows suggest brighter future
Despite registering over $2 billion in inflows, the Grayscale's ETHE exodus washed away the positive performance.
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Updated: Sep. 3, 2024 at 10:49 pm UTC
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The US-traded spot Ethereum (ETH) exchange-traded funds (ETFs) registered $476 million in negative net flows during the first month of trading, failing to overcome the outflows stemming from the unlock of Grayscale’s ETHE.
Bloomberg senior ETF analyst Eric Balchunas the “heroic” performance of the Newborn Nine spot Bitcoin (BTC) ETFs, which recorded enough inflows to heavily overshadow the massive outflows experienced by GBTC.
The performance contrasts sharply with the $5 billion inflows seen by Bitcoin ETFs during a similar timeframe after their launch.
Analysts have attributed this disparity to several factors, including Bitcoin’s “first mover advantage,” the absence of staking options in Ethereum ETFs, and lower liquidity in the Ethereum market, making these ETFs less appealing to institutional investors.
Despite these challenges, some Ethereum ETFs showed signs of recovery towards the end of the month. Balchunas added that the outflows won’t continue forever, and the newly launched ETFs’ inflows will eventually catch up to the outflows. He said:
“But good news is unlock will end, there’s light at end of tunnel.”
Over $2 billion in inflows
Grayscale’s ETHE shed nearly $2.6 billion in its first month, based on Farside Investors data. The move was expected, as the same happened with its Bitcoin trust GBTC.
Although the other Ether ETFs’ inflows were not enough to secure a positive monthly net flow, the amount of cash directed to these crypto products has been significant nonetheless.
BlackRock’s ETHA surpassed $1 billion in inflows, making it the seventh-largest ETF by year-to-date flows, according to a list shared.
Fidelity’s FETH also registered significant flows of roughly $393 million, making it the 19th largest ETF by year-to-date flows, while Bitwise’s ETHW is the third and last US-traded Ethereum ETF that managed to capture over $300 million in inflows during its first year.
Moreover, despite Grayscale’s ETHE’s massive outflows, its Ethereum mini trust, ETH, managed to capture nearly $240 million in inflows.
I the total inflows of US-traded Ethereum ETFs are bundled under one product, it would equate to the fourth-largest exchange-traded fund by 2024’s flows.
Mentioned in this article
Ethereum 
Bitcoin 
Grayscale Investments 
Fidelity Investments 
BlackRock 
Bitwise Grayscale Ethereum Trust 
Grayscale Bitcoin Trust Grayscale Ethereum Mini Trust iShares Ethereum Trust ETF Fidelity Ethereum Fund 
Bitwise Ethereum Fund 
Eric Balchunas Author 
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Gino Matos is a law school graduate and a seasoned journalist with six years of experience in the crypto industry. His expertise primarily focuses on the Brazilian blockchain ecosystem and developments in decentralized finance (DeFi).
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In this article
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
Bitcoin
$60,605.50
Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Grayscale Investments
Established in 2013 by Digital Currency Group, Grayscale Investments is a trusted authority on digital currency investing and cryptocurrency asset management.
Fidelity Investments
Fidelity Investments Inc., commonly referred to as Fidelity, is a multinational financial services corporation based in Boston, Massachusetts.
BlackRock
BlackRock, synonymous with global asset management, is an American multinational investment management corporation based in New York City.
Bitwise
Bitwise Asset Management pioneered the first cryptocurrency index fund and is the leading provider of rules-based exposure to the cryptoasset space..
The Grayscale Ethereum Trust (ETHE) by Grayscale is an investment vehicle designed to offer investors exposure to Ethereum, one of the leading cryptocurrencies by market capitalization.
The Grayscale Bitcoin Trust (GBTC) is a digital currency investment product that provides investors with access to Bitcoin through traditional investment channels.
The Grayscale Ethereum Mini Trust (Ticker: ETH) is a pioneering investment vehicle designed to provide investors with exposure to Ethereum (ETH) through a regulated security format.
The iShares Ethereum Trust ETF (ETHA) by BlackRock is an innovative investment product designed to provide investors with exposure to Ethereum, one of the leading cryptocurrencies.
The Fidelity Ethereum Fund (FETH) is an investment product designed to provide investors with direct exposure to Ethereum, one of the leading cryptocurrencies.
The Bitwise Ethereum Fund (ETHW) by Bitwise is a professionally managed investment product that provides investors with direct exposure to Ethereum (ETH).
Eric Balchunas is an American author, ETF analyst, and Senior ETF Analyst at Bloomberg Intelligence.
