Ethereum ETFs Struggle to Gain Traction – Here’s Why

Ethereum spot ETFs have struggled to match the popularity of Bitcoin ETFs, with net outflows of $556 million since their launch in July.

In contrast, Bitcoin spot ETFs have brought in nearly $19 billion over the past 10 months, with major players like BlackRock and Fidelity seeing significant success.

One reason for Ethereum ETFs’ slower growth is the lack of staking rewards, a key feature of direct ownership that can yield around 3.5%. While ETFs offer convenience and security for traditional investors, crypto specialists find them less appealing without these staking returns.

Bitcoin’s easier-to-understand narrative as “digital gold” also makes it more attractive to a broader audience. Its fixed supply of 21 million tokens serves as a clear inflation hedge, whereas Ethereum’s decentralized platform and smart contracts are harder to explain and market to traditional investors.

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Additionally, Ethereum’s price performance has been less impressive this year, rising only 4%, compared to Bitcoin’s 42% gain. Since the ETFs launched, Ethereum’s 30% price drop has dampened enthusiasm, particularly among retail investors, while Bitcoin’s steady growth has maintained strong investor interest.

Finally, Ethereum’s high valuation — about $290 billion — compared to many global banks and tech stocks may seem inflated, leaving some traditional investors wary of its long-term potential.

Kosta Gushterov