Could This Be a Turning Point?

Data from Farside shows that we may be at a turning point for the Ethereum exchange-traded funds (ETFs).

The Ether funds have just managed to overtake the Bitcoin funds in total daily flows. While BTC funds saw combined outflows on 30 July of US$18.3 million (AU$28m), the Ethereum funds managed inflows of US$33.7 million (AU$51.57m).

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Data for the most recent trading day is incomplete as BlackRock’s numbers are missing but indicate we could see a continuation of the trend.

Interesting to note is also that BlackRock’s ETHA fund took in more funds than its Bitcoin fund IBIT. While IBIT saw US$74.9 million (AU$114.63m) in new funds coming in, ETHA had US$118 million (AU$180.59) inflows in the same time period.

Meanwhile, ETH has had a hard time finding traction with the price per coin dropping 3% on the daily timeframe.

At the time of writing, one ETH is changing hands for US$3,193 (AU$4,885) as data from CoinMarketCap shows. Notably, yesterday marked Ethereum’s ninth birthday, which the co-founder and the team shared on social platform X (formerly Twitter).

Expert Positive About Future ETF Flows

Jan Altmann, a financial expert at the ETC Group, has a positive outlook regarding the potential market impact of the newly introduced Ethereum spot ETFs. His optimism is based on the anticipated net inflows these ETFs are expected to attract.

Drawing a parallel from the past, Altmann expects these Ethereum ETFs to receive about 10 to 15 percent of the net inflows that followed the launch of Bitcoin spot ETFs. This projection translates to approximately US$1.6 billion (AU$2.44bn) entering the market through these ETFs within their first three months.

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Nonetheless, we expect a significant price increase from these inflows of almost 90 percent due to Ethereum’s higher performance sensitivity to global Ethereum ETP inflows. Historically, a one percent increase in global Ethereum ETP assets under management was associated with about six percentage points of performance improvement in Ethereum.

Jan Altmann, ETC Group

Overall, Altmann’s analysis not only highlights the expected financial inflows but also underscores the broader implications for Ethereum’s market dynamics. Increased investor activity and a possible uplift in Ethereum’s market performance are directly linked to the success and acceptance of these new ETFs.