Spot Ethereum ETFs Make a Splash: First-Day Trading Volume Hits $1.08 Billion

The United States listed spot Ether exchange-traded funds (ETFs) saw a remarkable start, generating around $1.08 billion in cumulative trading volume on their first day. This volume represents roughly 23% of what the spot Bitcoin ETFs experienced on their opening day.

• Ether ETFs generated $1.08 billion in trading volume on their debut. The inflows to the new ETFs were substantial, overcoming outflows from Grayscale's converted trust.

• Grayscale and BlackRock led with $458 million and $248.7 million, respectively. Fidelity and Bitwise rounded out the top four with significant volumes.

• Analysts predict continued strong performance and inflows of up to $325 million in Grayscale’s ETHE.

The launch of spot Ether ETFs follows the US securities regulator’s approval of the final S-1 forms, enabling their listing on platforms like Nasdaq, NYSE Arca, and Chicago Board Options Exchange.

Ethereum ETFs total trading volume on July 23 | Source: X

The Grayscale Ethereum Trust (ETHE) and BlackRock’s iShares Ethereum Trust (ETHA) were the top performers, with trading volumes of $458 million and $248.7 million, respectively. Preliminary data from Bloomberg ETF analyst Eric Balchunas highlighted these figures.

Following closely were Fidelity’s Ethereum Fund (FETH) and Bitwise’s Ethereum ETF (ETHW), which posted $137.2 million and $94.3 million in volumes. However, the 21Shares-issued spot Ether ETF lagged, failing to reach the $10 million mark.

Balchunas described the $625 million volume from the “Newborn Eight” products — excluding Grayscale’s ETHE — as “healthy” and anticipated a significant portion converting to inflows.

James Seyffart, another Bloomberg ETF analyst, expects inflows between $125 million and $325 million, depending on the number of investors firms had lined up. For context, spot Bitcoin ETFs saw $655.2 million in inflows on their first trading day, including a $95 million outflow from Grayscale’s converted Bitcoin product.

Ethereum ETF inflows | Source: Cointelegraph 

The new Ether ETFs posted a net inflow of $106.6 million on their first day, despite significant outflows from Grayscale’s freshly converted Ethereum Trust. BlackRock’s iShares ETF (ETHA) led with $266.5 million in inflows, followed by Bitwise’s Ethereum ETF (ETHW) with $204 million. Fidelity’s Ethereum Fund (FETH) secured third place with $71.3 million.

These inflows were sufficient to offset the $484.9 million outflow from Grayscale’s Ethereum Trust, which now allows investors to sell shares more easily due to its conversion to a spot ETF.

Ethereum ETF issuers waive fees | Source: X

Several firms, including Fidelity, 21Shares, Bitwise, Franklin, and VanEck, have waived fees on their ETFs temporarily or until reaching a specific amount in net assets. Most spot Ether ETFs will offer a base fee between 0.15% and 0.25% after this period. Notably, ETHE’s fee remains at 2.5%.

BlackRock is offering a discounted fee of 0.12% for the first 12 months or until the fund reaches $2.5 billion in net assets. The Grayscale Ethereum Mini Trust follows a similar structure.

In January, spot Bitcoin ETFs faced a similar dynamic, with Grayscale’s Bitcoin Trust seeing over $17.5 billion in outflows following the launch of 11 spot BTC funds. Analysts expect the introduction of Ether ETFs to similarly drive institutional participation and broader adoption of digital assets.

However, Bloomberg's Eric Balchunas suggests that Ether ETFs may initially play a secondary role to Bitcoin ETFs in terms of inflows. He notes that Bitcoin’s narrative is simpler to explain to traditional investors compared to Ethereum’s complex ecosystem.

Read more: 

1. Best Ethereum ETFs to Watch in 2024

2. Best Spot Bitcoin ETFs to Buy in 2024

Nansen, a blockchain analytics provider, launched the industry’s first Ether ETF analytics dashboard, offering real-time insights and data for traders. This tool aims to enhance transparency and provide crucial information on ETF flows.

Edward Wilson, an analyst at Nansen, believes that the new ETFs could introduce substantial new capital into the crypto space. He anticipates that Ether ETFs might capture about 25% of the assets under management (AUM) of current spot Bitcoin ETFs.

ETH/USDT price chart | Source: KuCoin 

The introduction of these ETFs is expected to drive up the price of ETH due to increased demand. Unlike Bitcoin, a significant portion of ETH is locked in staking and smart contracts, contributing to its scarcity and potential for sharper price movements.

The SEC’s restriction on staking ETF-held ETH could lead some investors to prefer direct staking over ETFs, potentially moderating the demand for ETFs. Nevertheless, the distinct audiences for direct ETH holding versus ETF investments will likely persist.

Read more: What’s the Ethereum Price Prediction After SEC Approves Spot Ether ETFs?

The approval of spot Ether ETFs by the SEC marks a significant milestone for Ethereum, potentially attracting a broader range of investors and significantly influencing its market dynamics. As the market adjusts, the interplay between direct ETH holding, staking, and ETF investments will play a crucial role in shaping the future of the Ethereum ecosystem. Investors should remember that all investments carry risks, and it's essential to conduct thorough research and consider these risks before making any investment decisions.