Grayscale Leads as ETH ETFs Record $361 Million: Analyst Expect 20% of Bitcoin ETFs’ Day-One Volume
Shayan Chowdhury23 Jul 20243 min read
Less than three months ago, it seemed improbable, but today it turns into reality. The first-ever spot Ethereum exchange-traded funds (ETFs) commenced trading in the U.S. on Tuesday morning at 9:30 a.m. EST. The group of newly launched Ethereum-based ETFs has posted impressive figures, with a total trading volume of $361 million within the first 90 minutes. According to a prominent analyst, Ethereum ETF trading volume might record a significant share of Bitcoin’s first day ETF volume.
Ethereum Records 50% Of Bitcoin’s Initial Trading Volume
Newly launched Ethereum ETFs have posted impressive figures, with a total trading volume of $112 million within the first 15 minutes. This volume is notable, representing over half of what Bitcoin ETFs achieved on their first day, yet it surpasses many expectations for a typical ETF launch. In the first 90 minutes, ETH ETF recorded $361 million in trading volume.
ETF analyst Eric highlighted that this volume is substantial compared to other ETF launches but still trails behind the explosive debut of Bitcoin ETFs. Grayscale, specifically, has outperformed early in the trading session, indicating a strong investor interest in ETH ETF market.
Eric further highlighted that this impressive figure positions them around the 15th spot in overall ETF volume, on par with well-known funds like $TLT and $EEM, placing them in the top 1% of traded ETFs. In stark contrast to typical ETF launches, which rarely see volumes exceeding $1 million on their first day, each ETF in this group has significantly exceeded that benchmark.
Ethereum Price Faces Rising Bearish Threat
Following the launch of the Ethereum spot ETFs, there may be a temporary setback as outflows from the Grayscale Ether Trust could weaken market sentiment. Similar to the experience with Bitcoin ETFs, investors might transfer their funds to options that offer lower fees. As a result, the ETH price might head toward a crash.
The Grayscale Ethereum Trust ETF (ETHE) evolved from the original Grayscale Ethereum Trust and currently manages about $9 billion in ether. Another challenge that could plunge demand for spot Ethereum ETFs is the lack of staking rewards. Directly holding ether offers the significant benefit of staking, which enables investors to earn rewards, enhancing its appeal.
ETFs offer a regulated and convenient way for institutional investors to access Ethereum, but retail investors and those seeking higher returns may choose to hold Ethereum directly to capitalize on staking rewards.
Investors interested in staking are typically more familiar with cryptocurrencies and comfortable managing their own custody. For those who prefer not to handle Ethereum directly, these ETFs provide an ideal means to benefit from asset appreciation, even in the absence of staking yields.
Eleven spot Bitcoin ETFs, launched in the U.S. in January, have collectively reached a market cap of nearly $60 billion and a cumulative trading volume of $330 billion.
According to Nate Geraci, president of The ETF Store, the spot Ethereum market is currently less than a third the size of the Bitcoin market. Hence, the demand will be a third of Bitcoin’s demand.
Also Read: Ethereum Foundation Dumps ETH Ahead of ETF Launch: Shady Strategy in Action?
