- The Ethereum funds market premium has turned negative, showing weak institutional demand for ETH products.
- Nate Geraci Thinks Ethereum ETF Staking Could Happen Earlier Under the Trump Administration
Ethereum (ETH) fell 10% over the past two weeks amid downward pressure. Due to its disappointing performance compared to Bitcoin (BTC)ETH dominance also plunged to a low of less than 13%.
One of the factors contributing to Ethereum’s lack of earnings is low institutional demand. This can be seen in the removal of flows to spot ETH exchange-traded funds (ETFs). Ethereum ETFs have only seen four weeks of positive total net flows since launch, according to SoSoValue. This lack of demand has led to a decline in the fund market premium.
In fact, data from CryptoQuant revealed that the market premium for Ethereum funds was mostly negative last week. This can be interpreted as a sign that ETH is trading at a discount in the ETF market.
(Source: CryptoQuant)
The negative data further revealed that there is selling pressure and low demand for ETH in the ETF market. This reflects bearish sentiment as large investors remain cautious.
However, given that Bitcoin ETFs continue to post strong numbers with over $2 billion in inflows last week alone, why are Ethereum ETFs underperforming?
Here’s Why Ethereum ETFs Are Struggling
Nate Geraci, President of ETF Store, shared his ideas on some factors that could lead to low inflows into ETH ETFs, aside from bearish market sentiment.
He noted that since the launch of Bitcoin ETFs, they had a first-mover advantage and “stole the spotlight” from Ethereum.
Additionally, outflows from the Grayscale Ethereum Trust ETF (ETHE) have also dampened the outlook for ETH ETFs. Since its launch, ETHE has seen $20 billion in outflows. Geraci also said that advisor training around ETH was inadequate. Thus, institutions are less attracted to the asset.
“Just think it’s a matter of time before ETH ETF spot inflows start to accelerate. This might take a while.
A Trump victory is good for ETH ETFs
Geraci further of opinion that if former US President Donald Trump wins the November 5 election, it could bode well for Ethereum ETFs.
Before the U.S. Securities and Exchange Commission (SEC) approved Spot ETH ETFs, it ordered issuers to remove the staking provision. However, Geraci believes staking would likely be allowed under the Trump administration.
Ethereum traders appear to be pricing in a Trump victory for the US presidency. At press time, Ethereum funding rates had increased by 85% to 0.0119. This suggests a rise in bullish sentiment in the futures market, where demand for long positions is high.
(Source: CryptoQuant)
