Outflows of more than $1.5 billion from the high-fee Grayscale Ethereum Trust have outpaced inflows into other spot products.
Negative Net Flows in the First Week
Spot Ether (ETH) exchange-traded funds (ETFs) saw negative net flows in their first week due to heavy outflows from Grayscale’s Ethereum Trust (ETHE), which outpaced interest in competing products. Similar Bitcoin (BTC) funds, which debuted in January, captured $1 billion in net flows over the first four days, despite also suffering notable outflows from an existing Grayscale fund. Overall, spot ETH ETFs supported $340 million in negative net flows, with more than $1.5 billion exiting the Grayscale Trust fund, according to Farside Investors.
Ether Price Impact
The price action seemed to replicate the lackluster ETF action, with Ether falling 5% the previous week while Bitcoin rose 2%. Excluding Grayscale’s ETHE, the other recently-listed Ether ETFs pulled in $1.15 billion in proceeds the previous week, led by offerings from BlackRock, Bitwise, and Fidelity.
Future Outlook for Ether ETFs
Although the current pace of ETHE outflows suggests the fund could run out of assets over the next four weeks, analysts expect them to start tapering off later this week. Quinn Thompson, founder of the digital asset hedge fund Lekker Capital, noted that ETHE has already lost the same amount of assets as GBTC when Bitcoin set a local low in late January during its post-ETHE selloff. BTC fell 15% to below $39,000 within two weeks before subsequently rebounding to hit new all-time highs.
Mads Eberhardt, principal cryptocurrency analyst at Steno Research, noted that GBTC outflows slowed considerably after the eleventh trading session and predicted that ETHE could follow suit. “Ethereum ETF net outflows have not yet declined, but it is likely to happen this week,” Eberhardt said in a post on X on Monday. “When it does, it will only be to the upside from there,” he added.
