Ethereum ETFs Registered Negative Results on the Second Day of Trading – What is the Reason?

On its second day of trading, the US-based spot Ethereum ETFs performed worse than the first day as they registered a net outflow of $113.3 million.

Despite the negative results, out of the 8 newly launched ETFs, as many as 7 registered net inflows with Fidelity’s FETH and Bitwise’s BITW topping the inflows with $74.5 million and $29.6 million respectively. BlackRock’s ETHA attracted $17.4 million.

What accounts for the poor results?

The overall negative outflows were largely due to significant sales from the recently converted Grayscale Ethereum Trust (ETHE), which saw outflows of $326.9 million.

Grayscale’s ETHE, launched more than seven years ago, allowed institutional investors to buy ETH but imposed a six-month lock-in period on investments.

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Since its conversion to a spot ETF, investors can sell their ETH more freely.

In the two days following its conversion, ETHE suffered outflows of $811 million, with existing investors selling just under 10% of the fund’s holdings.

Kosta Gushterov

Kosta has been working in the crypto industry for over 4 years. He strives to present different perspectives on a given topic and enjoys the sector for its transparency and dynamism. In his work, he focuses on balanced coverage of events and developments in the crypto space, providing information to his readers from a neutral perspective.