Ethereum Products Bleed Funds Amid Regulators' Silence on ETF Application

Investments in digital assets reported the first entry in five weeks with $130 million in net gains over the past week.

Interestingly, the lack of action by US regulators regarding ethereum ETF spot applications has led to speculation that approval will not come soon, and this has resulted in significant capital outflows for ethereum in the same period of time.

Investors Brace for ethereum Spot ETF Approval Delay

CoinShares' latest edition of Digital Asset Fund Flows Weekly Report revealed that bitcoin investment products experienced $144 million in inflows, recovering from a slow month. Short bitcoin ETPs experienced outflows of $5.1 million, bringing total outflows over the past 8 weeks to $18 million.

Among altcoins, Solana stood out with weekly inflows of $5.9 million. With US regulators showing little interest in ethereum ETF spot applications, there is growing speculation that approval is not on the horizon. This lack of progress has been evident in capital outflows, which exceeded $14 million last week.

Meanwhile, investment products designed for Polkadot recorded inflows of $1.3 million, followed by XRP and Litecoin, which had $0.6 million and $0.1 million, respectively.

CoinShares also revealed that exchange-traded products (ETP) volumes are declining, with just $8 billion traded last week compared to an April average of $17 billion.

Grayscale leads US capital inflows

According to the asset manager, this drop indicates that ETP investors currently need to be more active in the crypto market, which represents 22% of the total volume on global exchanges, up from 31% last month.

In terms of regions, the United States received the largest inflow of $135 million, while Grayscale, a major player, recorded its lowest weekly outflows since January, totaling $171 million. Switzerland also received tickets worth $14 million.

Hong Kong, which saw record inflows the previous week, only received $19 million in inflows, suggesting that most of the capital was invested in the first week after the launch of bitcoin ETFs as seed capital. Additionally, Australia and Brazil received inflows of $0.7 million and $0.3 million during the same period.

On the other hand, Canada and Germany continued to experience capital outflows, with $20 million and $15 million, respectively, bringing their combined outflows so far this year to $660 million. Sweden also recorded weekly outflows of $4.8 million.

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