On their second day of trading, United States-based spot Ethereum exchange-traded funds (ETFs) recorded net outflows of $113.3 million, according to data reported by Farside Investors. This negative trend was primarily driven by significant withdrawals from Grayscale’s Ethereum Trust.
This follows the products being approved in late June, after a long fight by proponents. The Securities and Exchange Commission (SEC) only allowed the trading to start on July 23.
Despite this overall trend, seven out of the eight newly launched spot Ethereum ETFs actually saw net inflows. The Fidelity Ethereum Fund (FETH) and the Bitwise Ethereum ETF (BITW) led the pack, attracting $74.5 million and $29.6 million respectively.
BlackRock’s iShares Ethereum Trust (ETHA), which had the strongest performance on the first day, saw more modest inflows of $17.4 million on the second day.
The converted Grayscale Ethereum Trust (ETHE) was the main contributor to the overall outflows, losing $326.9 million. This follows a $484.4 million outflow on its first day as a spot Ethereum ETF. In total, ETHE has seen $811 million in outflows over two days, representing about 9% of its holdings.
This pattern isn’t unusual for newly launched crypto ETFs. Spot Bitcoin ETFs, for instance, experienced net outflows in six of their first ten trading days, with many attributing this to outflows from the Grayscale Bitcoin Trust ETF.
Market movements
CoinMarketCap data shows that Ethereum’s (ETH) price has also taken a hit, trading at $3,144 at the time of reporting, down over 8% in 24 hours and 7.2% over the week.
This decline coincided with a broader market downturn, with the S&P 500 falling 2.3%. However, Ethereum’s drop was more pronounced compared to Bitcoin’s 2.6% decrease, aligning with predictions that ETH’s price could be particularly sensitive to ETF-related fund flows.
Despite the second-day outflows, it’s worth noting that the first day of trading saw cumulative net inflows of $106.6 million across all Ethereum ETF products, indicating a mixed start for these new investment vehicles.