The launch of the first spot Ethereum exchange-traded funds (ETFs) in the United States has made a significant impact, with several funds seeing high trading volumes and impressive activity on their first day.
Across nine funds, the total trading volume surpassed $1 billion, ultimately reaching $1.1 billion by the end of the day. This figure doubled the $600 million recorded midway through Tuesday.
Although this strong performance didn’t eclipse the launch of spot Bitcoin ETFs, some Ethereum ETFs managed to rank among the top 50 highest-traded ETF launches in US history.
Top performers lead the pack
BlackRock’s iShares Ethereum Trust (ETHA) led the way with $258.6 million in inflows, establishing itself as a standout performer.
Fidelity Ethereum Fund (FETH) followed with $137.9 million. Bitwise Ethereum ETF (ETHW) and Grayscale Ethereum Mini Trust (ETH) also performed well, attracting $94.3 million and $65.6 million, respectively.
Vaneck Ethereum ETH (ETHV) rounded out the top five with $44.8 million in inflows.
Grayscale’s recently converted Ethereum ETF made a notable entrance, achieving nearly $470 million in trading volume.
This placed it among the top 25 best-performing ETF launches ever. However, the Grayscale Ethereum Trust (ETHE) saw significant outflows, totaling $484 million.
Bloomberg analyst, James Seyffart, noted how Ethereum ETFs took in $107 million on their first day in a tweet posted on X-
While BlackRock and Grayscale dominated the launch with hundreds of millions in trading volume, other ETFs struggled to reach similar heights.
In contrast, 21Shares’ Core Ethereum ETF (ETHC) saw a modest $8.7 million on its first day. This was reminiscent of the Bitcoin ETF launch, where a large trading volume masked the actual new investment inflows.
ETH remains stable
Despite the high trading volumes for the new Ethereum ETFs, the price of Ethereum ($ETH) remained relatively stable the following day.
As of Wednesday morning, $ETH was trading around $3,445, with a 1.8% decrease over the last 24 hours.
Data from CoinGecko showed a 24-hour trading volume of $22.7 billion, with prices fluctuating between $3,403.72 and $3,534.98.
While the debut of spot Ethereum ETFs did not significantly affect centralised $ETH trading volumes, it did alter market dynamics.
According to Kaiko, the volume of $ETH traded relative to Bitcoin increased from 22% to 41%, indicating accelerated trading activity in $ETH markets.
The CEO of ConsenSys, Joseph Lubin, emphasised the importance of broader $ETH ownership for ecosystem decentralisation but cautioned against viewing the ETF approval as a fundamental shift in SEC policy.
On the other hand, the CEO of Professional Capital Management, Anthony Pompliano, suggested that the approval of Ethereum ETFs reflected a broader trend of integrating cryptocurrency assets into traditional financial markets.
Despite the relatively subdued market reaction, Pompliano highlighted Ethereum’s potential for portfolio diversification, which could attract traditional investors over time.
Political and regulatory considerations
The US Securities and Exchange Commission’s (SEC) preliminary approval in May paved the way for these funds to list on exchanges, surprising many in the crypto industry.
This initial excitement has since given way to forecasts of significant asset growth over the next year.
The head of investment research at Sygnum Bank, Katalin Tischhauser, anticipates aggregate assets under management (AUM) for these funds to reach between $5 billion and $10 billion over the next 12 months.
She expects hedge funds to move quickly, with new investor demand likely accelerating in early 2025.
The future of Ethereum ETFs will also be influenced by the US political and regulatory environment.
Recent political shifts, such as Vice President Kamala Harris’s potential leadership of the Democratic Party and President Joe Biden’s decision to not seek re-election, have renewed optimism among crypto advocates for a more favourable regulatory approach under a possible Trump administration.
However, sustained inflows are necessary for Ethereum ETFs to establish a firm market position, according to Ryan McMillin, who is the chief investment officer at Merkle Tree Capital.
