The history Ethereum Exchange Traded Funds (ETFs) are currently experiencing negative sentiment, which appears to mimic the negative trend seen with Bitcoin Spot ETFs on the price of BTC after its inception in January this year. Their respective ETFs have seen declining inflows and deteriorating performance, closely mirroring each other as the two most popular cryptocurrencies face downward pressure.
Ethereum Spot ETFs Face Major Challenge
According to According to analysts at research platform Woo X, Ethereum spot ETFs are following a similar downward trend as Bitcoin, indicating the overall bearish trend in the market. Following the launch of ETH spot ETFs on July 23, Woo X noted that the price of the crypto asset declined by 11%, dropping from $3,500 to a low of around $3,100 simultaneously in just three days.
In addition to the current unfavorable market conditions, the firm’s analysts say that ETH spot ETFs are facing a similar hurdle that BTC had previously faced, citing selling pressure from the largest asset management firm, Grayscale.
The platform noted that after the launch of the Bitcoin Spot ETFBTC also saw a 20% price drop from around $48,000 to $38,000 in over two weeks due to selling pressure from Grayscale’s BTC ETF, GBTC.
However, the price then climbed from the $38,000 price level to an all-time high of $73,000 as Grayscale GBTC selling pressure decreased and net capital entering the funds continued to increase.
In the event that Ethereum experiences a similar circumstance, Woo X believes that the price of ETH could hit the $2,850 mark. In the meantime, the precise effect will be determined by the selling pressure exerted by Grayscale and net inflows into ETH spot ETFs in general.
ETH Spot ETFs Attract Negative Flows
Investor interest in spot Ethereum ETFs appears to have plummeted as funds saw a negative outflow after Tuesday’s trading, with millions of dollars flowing out of the products.
According to data According to London-based investment management firm Farside Investors, the products saw an overall outflow of $47 million. The Fidelity ETH ETF (FETH) was the only fund to close the market on a positive note, attracting about $4.9 million in daily inflows.
Other funds from asset management companies such as Black rockEthereum ETF (ETHA), Bitwise ETH ETF (ETHW), 21Shares ETH ETF (CETH), VanEck ETH ETF (ETHV) and Franklin ETH ETF (EZET) closed the market on a negative note with zero inflows. Grayscale ETH ETF (ETHE) We saw another day of releases reaching around $52.3 million.
This outflow suggests that investors are exiting the products due to ETH’s recent price movement and general market fluctuations, reflecting a cautious approach as they reassess their exposure to the altcoin.
Featured image from Unsplash, chart from Tradingview.com
