The gaze of the crypto community has been fixed on the performance of the much-anticipated Ethereum future exchange-traded funds (ETF) that were launched this week.
However, analysts have provided explanations for why the initial week did not meet expectations in terms of price and value.
Lack of Significant Attraction for Ethereum Futures ETFs
The debut of several Ethereum Future ETFs this week has left many speculators who have eagerly anticipated it for over a year feeling underwhelmed.
Nine Ethereum Futures ETFs were introduced to the market this week by investment firms ProShares, VanEck, Bitwise, Valkyrie, Kelly, and Volshares.
However, upon their launch on October 2nd, Ether Futures attracted just under $2 million in flows, as per a recent report.
Anticipating a price increase, Ethereum’s price rose by approximately 4.5% to reach $1,734 the day before the launch, on October 1st. However, it concluded on October 2 at $1,659, marking a 4% decline.
At the time of publication, Ethereum’s price is $1,643.
On October 2, the six funds amassed a total trading volume of $1.92 million. However, the largest among them, the ProShares Ether Strategy ETF, contributed significantly with a trading volume of $878,560, making up 45.7% of the total volume.
Read more: How to Buy Ethereum (ETH) and Everything You Need to Know
This presents a notable difference compared to the rapid attainment of $1 billion in flows within just two days for ProShares Bitcoin Strategy ETF (BITO) upon its 2021 launch. However, the overall crypto market was in a robust phase during that time.
However, there’s no need for alarm. According to Eric Balchunas, a senior ETF analyst at Bloomberg, this has occurred previously:
“Any crypto-related launch tends to be a ‘buy the rumor, sell the news’ event,”
Destiny Awaits for Spot Ethereum ETFs
He also observed a decrease in the price of Bitcoin following the initial surge in BITO demand. He suggests a similar potential scenario for Ethereum’s price:
“If you look at BITO, Bitcoin went down a lot after that […] I wouldn’t be surprised if this happens with futures ETFs either.”
Meanwhile, the SEC recently announced that it would be delaying its approval decisions for spot Ethereum ETFs. An announcement will not be made until at least the end of 2023.
According to two separate filings, the SEC has postponed the outcome for both ARK 21Shares Ethereum ETF and the VanEck Ethereum ETF.
Both firms submitted applications for the spot Ethereum ETF on September 6. If granted approval, these would mark the inaugural Ether-based ETFs providing direct access to ETH within the US.
Read more: Ethereum Interest Rates: Where To Earn the Most
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