Ethereum ETFs Seize the Dip, Record Volumes Pour into ETHA and Allies

US Spot Ethereum exchange-traded funds (ETFs) have seen an increase in net inflows in the past few days. Meanwhile, the price of ETH is up, despite the overall market downturn.

While Bitcoin and other major cryptocurrencies are in the red, ETH managed a 2% increase on the 24-hour timeframe, though is still down 10% on the weekly chart.

At the time of writing Ether trades for US$2,790 (AU$4,439), a hefty discount to its all-time high of US$4,891 (AU$7,783) from November 2021 – over three years ago.

Related: Bitcoin Wins Regardless of US Trade Turmoil Outcome, Says Bitwise Strategist

The US Ether ETFs, which have underperformed historically – at least compared to their Bitcoin counterparts – have flourished on the apparent discounted price.

The last four days saw net inflows of US$487 million (AU$775 million) breaking the trend of prior days with net outflows.

BlackRock Continues to Dominate Crypto ETF Space

Just as with the Bitcoin ETFs, the largest fund, a BlackRock fund, continues to dominate. ETHA accumulated US$276.2 million (AU$439.5 million) on Tuesday alone, marking an almost seven-week-long streak of no net outflows.

In fact, since ETHA started trading on 23 July 2024, there have been only three days with net outflows, totaling US$141.8 million (AU$225.7 million).

Despite the massive gains, Grayscale’s Ethereum Trust (ETHE) is still the largest ETF, with US$3.6 billion (AU$5.73 billion) in assets under management (AUM), compared to ETHA’s US$3.42 billion (AU$5.44 billion).

Grayscale’s Ethereum Mini Trust (ETH), which took in some of the holdings from ETHE due to lower fees, is in third place with US$1.29 billion (AU$2.05 billion) in AUM, followed by Fidelity’s Ethereum Fund (FETH) with US$1.19 billion (AU$1.89 billion).

Several Altcoin Filings Despite Concerns Over Market Demand

The increasing popularity of these ETFs is no doubt part of the reason why so many filings for altcoin ETFs are arriving on regulators’ desks.

According to data from Kaiko, there are now over 40 such altcoin ETFs, with Solana and XRP far outnumbering their counterparts with a whopping 11 filings. Six of these filings are for Spot ETFs, while there are four filings for Futures ETFs, and one combo ETF each.

There are also three filings each for a combination of Ethereum and Bitcoin ETFs as well as basket ETFs, containing a variety of digital assets.

Related: Blunder by DPRK Hackers Leads to $121K XRP Loss; Ripple Co-Founder’s Accounts Also Breached

Several other altcoins have also pending applications for an ETF. However, it’s unclear what the demand for these ETFs will be once they are approved for trading; according to Kaiko, it is likely to be “shallow and concentrated on offshore venues”.

Furthermore the universe of investible products is smaller and the ability to capture basis between spot and futures doesn’t exist in the same way that it does for BTC and ETH. All of these factors could limit the demand for more crypto-related ETFs going forward. While approval processes might change, market dynamics still have to catch up.

Kaiko