Ethereum’s price action has been a major source of concern for investors in recent weeks, persisting in a downward trend. What makes the token’s struggles even more worrisome is that it has shown no signs of easing despite the recent launch of ETH spot ETFs (exchange-traded funds) in the United States.
However, it appears that the disappointing performance of ETH ETFs – so far – may even be contributing to Ethereum’s price woes in recent weeks. Specifically, Grayscale has seen a significant flow of capital out of its Ether fund, the Grayscale Ethereum Trust (ETHE).
Grayscale Ethereum Trust Hits $2.1 Billion in Outflows
After the first full week of trading, the U.S. Ethereum spot ETF market has seen a significant outflow of funds from crypto products. According to data from SoSoValue, a total of $169.35 million left ETH exchange-traded funds over the past week.
While this value still represents a significant amount of outflows from Ethereum spot funds, it is more than 50% lower than the outflows seen in the first week. In the first week, the ETH ETF market saw a net outflow of over $341 million.
The main fund responsible for this level of capital outflow is the Grayscale Ethereum Trust, which has seen a withdrawal of over $2.1 billion in the last two weeks. ETHE saw a net outflow of over $1.5 billion in the week of its launch.
Grayscale Ethereum Trust (ETHE) | Source: SoSoValue
On Friday, August 2, the Grayscale Ethereum Trust saw a total outflow of $61.43 million, according to data from SoSoValue. This latest fund move brings ETHE’s total net asset value to just under $6 billion.
Similar to when the Bitcoin spot ETFs were launched, Grayscale’s ETHE holders appear to be looking to redeem their shares of the fund, having been unable to do so for years. And as seen with BTC, the massive outflows appear to be putting considerable downward pressure on the Ethereum price.
Ethereum Price Overview
At the time of writing, the price of Ethereum is hovering around $2,907, reflecting a 2.2% drop in value over the past 24 hours. According to data from CoinGecko, the cryptocurrency has dropped by more than 10% over the past seven days.
This seven-day performance underscores the struggles the ETH token has faced in recent weeks. Data from CoinGecko shows that the price of Ethereum has fallen by nearly 8% over the past month.
Nonetheless, Ether maintains its position as the second largest cryptocurrency in the sector, with a market capitalization of over $347 billion.
The Ethereum price on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
