As a seasoned analyst with years of experience navigating the tumultuous seas of the cryptocurrency market, I must admit that the recent performance of Ethereum has been a rollercoaster ride for me and many other investors. The past week has been particularly challenging, as we witnessed the price of ETH plunge by over 12%.
Over the past few weeks, it’s been quite captivating to follow Ethereum’s price performance, even though it seemed to lag behind other major cryptocurrencies at first. Regrettably, the last seven days have not been kind to the crypto market, particularly altcoins like Ethereum, which experienced a significant drop in value exceeding 12%.
The current drop in Ethereum’s price might be related to the US Federal Reserve rate cut, but it’s also possible that the lackluster performances of Ethereum exchange-traded funds (ETFs) in the spot market could have a connection. After experiencing a prolonged period of increasing investor interest, there appears to be a slowdown in the demand for US-based ETH ETFs.
Spot ETH ETFs Snap 18-Day Positive Inflows Streak
On Friday, December 20th, as per SoSoValue’s data, I witnessed a total net outflow of $75.11 million from US-based spot Ethereum ETFs. This was the first time these Ethereum funds have recorded two consecutive days of negative returns.
On Thursday, December 19th, Ethereum exchange-traded funds experienced a total net withdrawal of $60 million. This marked a break in their 18-day run of accumulating funds and was the first day of negative inflows in December for these products.
It’s worth noting that BlackRock’s Ethereum Fund (ticker: ETHA) was the unique spot ETF that experienced outflows on Friday, according to data from SoSoValue. By the end of the week, this exchange-traded fund had seen withdrawals amounting to approximately $103.7 million.
Yesterday, Fidelity’s Ethereum Fund, identified by the ticker FETH, experienced a net investment of $12.95 million. On the same day, only two other Ethereum ETFs – Grayscale’s Ethereum Trust (ETHE) and Mini Trust (ETH) – recorded inflows. The inflow figures were $7.51 million for ETHE and $8.10 million for the Mini Trust.
Over the last two days, there was a significant outflow of approximately $135 million from Ethereum exchange-traded funds due to poor performances. Yet, these crypto products managed to end the week with a total net inflow of around $62.73 million for the fourth week in a row.
In much the same way, it seems that investor enthusiasm for Bitcoin ETFs is waning, with many funds experiencing withdrawals at the end of last week. On Friday alone, these cryptocurrency-related products experienced an estimated daily net withdrawal of around $276 million.
Ethereum Price
Currently, the price of Ethereum is approximately $3,342, which represents a 2.4% drop in the last 24 hours. If the exchange-traded funds (ETFs) focused on the spot market are to resume positive investment inflows, it could potentially ease the pressure on the Ethereum price.
Featured image from iStock, chart from TradingView
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2024-12-22 15:04