Spot Ethereum ETFs Net $107M in Inflows in Debut

Spot Ethereum ETFs netted $107 million in inflows on their first trading day on U.S. exchanges, despite $484 million in outflows from the Grayscale Ethereum Trust (ETHE), according to data from U.K. asset manager Farside Investors.

BlackRock's iShares Ethereum Trust (ETHA) and Bitwise Ethereum ETF (ETHW) led the nine funds that received Securities and Exchange approvals on Monday to begin trading with $273 million and $204 million in flows, respectively. The Fidelity Ethereum Fund (FETH) generated more than $71 million in inflows, the third highest total.

"As expected," wrote Mark Connors, head of global macro strategy at Onramp, a Dallas-based bitcoin-focused financial services firm. "That is what the headlines will say about the ETH ETFs first day."

The new products' debut followed less than 24 hours after the Securities and Exchange Commission approved the funds, which are based on the price of ether, the token of the Ethereum blockchain and second largest cryptocurrency with $420 billion in assets. 

The ETFs are the second grouping of funds to track a cryptocurrency's ongoing performance. Spot bitcoin funds started trading in January, generating about $655 million in inflows in their first day—more than five times Tuesday's spot Ethereum totals.

The Ethereum funds started with a total of about $10 billion in seed money, according to Farside Investors. Ethereum funds based on futures contracts have traded on U.S. exchanges for several years.  

Read More: Spot Ethereum ETF Fee Fight Shapes Up

The Grayscale Ethereum Trust differs from the other funds in that it is a conversion from an existing trust and carries by far the highest fee, 2.5%. It started with nearly $9.2 billion in assets under management.

"Damn." That's a lot," wrote Bloomberg Senior ETF Analyst Eric Balchunas in an X post Tuesday. "Not sure the Eight newbies can offset w inflows at this magnitude. On flip side maybe its for best to get it over with fast, like ripping a band aid off."

The Grayscale Ethereum Mini Trust (ETH), which is based on ETHE and also launched Tuesday, received $15 million in inflows.

Ether was recently trading just below $3,450, roughly flat over the past 24 hours, according to crypto markets data provider CoinMarketCap, as investors had previously priced in the potential impact of the SEC decision. The cryptocurrency is well off its high set in late 2021 of over $4,500 but still up more than 45% year-to-date.

Ethereum ETF Trading Volume

Trading volume to the spot Ethereum ETFs hit roughly $1.1 billion, more than most ETFs reach in their debuts, but also well short of the more than the $4.6 billion that spot bitcoin ETFs generated in their debut. 

"The greater amount of ETH ETF trading (20%) relative to BTC [first day] compared to expected flows (10-15%) is a sign that Wall Street is more engaged than investors are. For now," Onramp's Connors wrote. 

Spot bitcoin funds are approaching $20 million inflows and now manage about $55 billion in AUM. 

Read More: Spot Ethereum ETFs Kick Off First Day of Trading

In a note to etf.com, Joe DiPasquale, the CEO of fund manager BitBull Capital, wrote that institutional investors are "still...most comfortable with Bitcoin," but that "many hedge fund investors are more bullish on the appreciation of Ethereum vs Bitcoin" at its current price.

"Ethereum has more technical strength in its protocol; speedier, lower-cost transfers and easier to build on top of," he wrote, noting that bitcoin is just 9% off its record high in March, while ether is roughly 30% from its all-time high. 

"We believe it (ether) could climb further but will find resistance" at about $5,000," DiPasquale wrote.