{"id":553966,"date":"2023-10-03T20:00:42","date_gmt":"2023-10-03T20:00:42","guid":{"rendered":"https:\/\/wncen.com\/?p=553966"},"modified":"2023-10-03T14:51:12","modified_gmt":"2023-10-03T14:51:12","slug":"ethereum-etfs-face-lackluster-debut-from-small-investors-is-the-hype-fizzling-out","status":"publish","type":"post","link":"https:\/\/wncen.com\/news\/ethereum\/ethereum-etfs-face-lackluster-debut-from-small-investors-is-the-hype-fizzling-out\/","title":{"rendered":"Ethereum ETFs Face Lackluster Debut From Small Investors: Is The Hype Fizzling Out?"},"content":{"rendered":"

Yesterday’s launch of futures-based <\/span>Ethereum <\/span>(ETH<\/a>) exchange-traded funds (ETFs) delivered underwhelming results, with shallow trading volumes indicating a deficient demand for ETH exposure.<\/span><\/p>\n

Furthermore, a recent report by The Wall Street Journal <\/span>report <\/span><\/a>by The Wall Street Journal, it was revealed that the launch of the first Ethereum exchange-traded funds on Monday generated little interest from small investors.\u00a0<\/span><\/p>\n

These ETFs provided individual investors access to the second-largest cryptocurrency through brokerage accounts. However, per the report, most of the futures-based <\/span>Ether ETFs <\/span><\/a>ended the day in the red, with a combined trading volume of less than $2 million.<\/span><\/p>\n

Related Reading: Bitcoin News: Revival Of \u201cSatoshi Nakamoto\u201d Account Could Signal Slump In BTC Price?<\/a><\/div>\n

Red Flags For Ethereum ETFs?<\/span><\/h2>\n

The Ether ETFs, offered by prominent asset management firms such as ProShares, VanEck, and <\/span>Bitwise <\/span><\/a>Asset Management, are entering a highly competitive market. Experts believe these funds will have to compete fiercely in cost and marketing strategies to attract investors amidst the crowded landscape.<\/span><\/p>\n

Eric Balchunas, senior ETF analyst at Bloomberg Intelligence, expressed his concerns regarding the funds, stating:\u00a0<\/span><\/p>\n

A lot of these funds are going to struggle to get assets. There’s probably only room for one stud in this race.<\/span><\/p><\/blockquote>\n

During a Bloomberg TV appearance, Balchunas <\/span>emphasized <\/span><\/a>the relatively low trading volume of the Ethereum ETFs compared to BITO, a <\/span>Bitcoin <\/span><\/a>(BTC) ETF that tracks the price of BTC using Bitcoin Futures launched in 2021.\u00a0<\/span><\/p>\n

Notably, the trading environment for the first futures-based Ether ETFs differs significantly from the first futures-based Bitcoin ETFs. ProShares’ initial Bitcoin ETF (BITO) debut, which took place during the peak of the crypto bull market, was one of the most highly traded ETF launches ever.\u00a0<\/span><\/p>\n

Conversely, on the inaugural trading day of Ether future ETFs, the value traded amounted to nearly $1.9 million by noon, with <\/span>Valkyrie <\/span><\/a>emerging as the frontrunner in the race for Ether futures ETFs. Initially focused on Bitcoin futures and later expanded to include Ether, the fund <\/span>experienced a 3.9% increase.<\/span><\/p>\n

VanEck’s EFUT managed to generate some volume by launching ahead of its competitors. However, volumes quickly dwindled, with a staggering 49% of EFUT’s daily volume occurring within its first trading minute.\u00a0<\/span><\/p>\n

Disappointing Launch Day For Futures-Based ETH<\/span><\/h2>\n

Senior analyst of k33 research, Vetle Lunde, <\/span>suggests <\/span><\/a>that this lackluster launch points to more choppy market conditions ahead. The highly anticipated launch day failed to meet market expectations, reminiscent of the underwhelming debut of Bakkt.\u00a0<\/span><\/p>\n

This sheds light on a seemingly “non-existent” demand for additional crypto exposure, indicating a continuation of the current consolidation range in the market.<\/span><\/p>\n

Related Reading: Bitcoin And Gold Poised For Growth Amidst US Fiscal Troubles, Top Macro Investor Says<\/a><\/div>\n

In defense of the lackluster ETF launch, it is worth noting that activity in crypto ETFs has been consistently shallow in recent months. BITO, for example, has witnessed consistent outflows since mid-July and experienced its third-lowest average daily volume (ADV) in September 2023, surpassed only by volumes in August and December 2022.<\/span><\/p>\n

The Ethereum futures products launched on Monday, along with their respective net expense ratios, include:<\/span><\/p>\n