As a seasoned crypto investor with over a decade of experience in this dynamic market, I can’t help but feel a sense of intrigue and, perhaps, a touch of disappointment regarding the underwhelming response to the spot Ethereum ETF launch. Having witnessed the meteoric rise of Bitcoin ETFs, I find it interesting that their Ethereum counterparts have yet to replicate that success.
As a crypto investor, I’ve noticed that the market response to the debut of the spot Ethereum ETF has been relatively subdued when put side by side with Bitcoin ETFs. Despite this, Bobby Zagotta, the CEO of Bitstamp for the Americas and their global commercial chief, opines that if the Ethereum ETFs had launched in January, they might have garnered more traction given institutional adoption rates.
Speaking at the ongoing TOKEN2049 event in Singapore, Zagotta noted:
“I think they have not lived up to expectations, but I attribute that to this moment in time”.
He further added that digital assets are currently behaving as risk assets driven by macro uncertainty. Zagotta added that this “is a testament to the maturity of this market versus a year ago, two years ago even”.
In January 2024, the introduction of Bitcoin-based exchange-traded funds (ETFs) took place. Since then, over a period of approximately eight months, these financial instruments have attracted a total of $17.5 million in investments.
Conversely, Ethereum-based ETFs are relatively new, commencing trading about seven months after the initial ones, starting in July. In mere two months since their launch, these ETFs have experienced over $600 million in total withdrawals, as stated by a Bitstamp executive.
These Ether Exchange Traded Funds (ETFs) debuted at a challenging time for risky assets in the market. Currently, investors seem to be adopting a watchful stance due to uncertainties surrounding the election, regulatory matters in the U.S., and broader sociopolitical issues. In essence, things are rather stagnant compared to usual activity levels.
In my opinion, the timing of the ETF launch impacted its performance. If the Ethereum ETF had been launched at the same time as the Bitcoin ETF, I believe it could have performed more favorably,” he stated.
Ethereum ETFs Continue to Struggle
Currently, Ethereum (ETH) is hovering around $2,320, showing a 24-hour volatility of 0.5%. With a market cap of $279.23 billion and a daily volume of $15.08 billion, the price has been trading sideways near the resistance level of $2,500. Despite institutional interest in the asset class remaining relatively low, this has translated into muted demand for spot Ethereum ETFs since their launch.
Beginning September 2024, Ethereum ETFs have generally experienced a series of withdrawals, save for a brief period here and there. On a particular Wednesday, these Ethereum ETFs recorded withdrawals amounting to $15.1 million, with Grayscale’s ETHE accounting for the majority of these withdrawals, as indicated by data from Farside Investors.
As a researcher, I’ve observed that Ethereum, a blockchain platform I’ve been closely following, seems to be facing unprecedented challenges due to the increasing popularity of alternative solutions in the market.
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2024-09-18 11:57