ethereum spot exchange-traded funds (ETFs) that debuted in the United States last week have taken the broader cryptocurrency market by storm with significant inflows into these products.
According to a recent study report According to CoinShares, the arrival of these spot ETFs has attracted $2.2 billion, marking a pivotal moment for ethereum and its investors.
ethereum ETFs on the rise: what about bitcoin?
Coinshares revealed that with the launch of ethereum ETFs, it has not only seen a massive increase in capital but also a 542% increase in ethereum exchange-traded products (ETPs).
While the surge in demand reflects growing interest from investors seeking exposure to ethereum through regulated financial products, James Butterfill, head of research at Coinshares, stressed that the figure remains “somewhat controversial.” Butterfill explained:
This figure is somewhat controversial, as Grayscale invested capital from its new Mini Trust ETF (last week) into its current closed-end trust (about $1 billion), which may help explain the steady flow of outflows over the past few years.
Regardless, the introduction of these ETFs represents an important milestone as it aligns with broader market trends, where investors are increasingly looking for diverse and secure investment channels within the crypto space.
However, it is not all positive news, as the digital asset market in general has seen mixed results. For example, Grayscale’s ethereum trust saw net outflows of $285 million despite the overall buoyancy of the market.
The broader cryptocurrency market has also felt the impact of these developments. According to Coinshares, bitcoin has continued to attract significant capital alongside ethereum inflows, with $3.6 billion coming in over the past month.
This brings capital inflows so far this year to a record high of $19 billion, supported by speculation surrounding the US election and possible changes in Federal Reserve policies. James Butterfill noted in particular:
We believe that the US election comments on bitcoin as a potential strategic reserve asset and the increased chances of a rate cut by the Federal Reserve in September 2024 are the likely reason for the renewed investor confidence.
Furthermore, CoinShares’ report delves deeper into the implications of these flows, highlighting a “record total inflow of $20.5 billion” across all digital assets by 2024. Trading volumes have surged to their highest levels since May, further boosted by the launch of ethereum spot ETFs in the US.
btc and eth market performance
Following inflows into bitcoin and ethereum spot ETF products, their price performance has struggled to keep pace.
ethereum, for example, despite launching its spot ETF product last week, the asset demonstrated a “sell the news” price action, with eth dropping as low as $3,098 days after the news.
While the asset is now trading above $3,300, it has yet to match the bullishness of its spot ETF products. bitcoin, on the other hand, despite also experiencing a drop to $64,000 days after the eth spot ETF was launched, the asset quickly recovered.
Currently, bitcoin is trading at $68,850, a slight pullback from its previous price of $69,907 seen today. Notably, a notable factor attributed to the current bullish performance of bitcoin price is the recent positive statement by former President Donald Trump at the bitcoin 2024 Conference.
These statements include firing Gary Gensler if elected president and creating a strategic national bitcoin reserve within the US government.
Featured image created with DALL-E, chart by TradingView
