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

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.