The spot Ethereum ETF market experienced turbulence on October 1st, with Fidelity’s Ethereum Fund (FETH) recording its largest single-day outflow since its inception.
The emerging US spot Ethereum exchange-traded fund (ETF) market experienced a major shock on October 1st, with Fidelity’s Ethereum Fund (FETH) recording its largest single-day outflow since its inception. The outflow of more than $25 million highlights the challenges facing these investment vehicles despite an initial wave of optimism regarding their launch.
While Grayscale’s Ethereum Trust (ETHE) still holds the record for overall daily outflows, Fidelity’s milestone points to a broader trend of investor hesitation in the Ether ETF space. On October 1st, nine US-based Spot Ether ETFs experienced total outflows of $48.6 million, in stark contrast to the cumulative inflows observed in previous weeks.
Table: Ethereum ETF Flows (USD Million) – Selected Period
Grayscale ETHE and ETH seed data includes holdings data before conversion.
Source: Farside Investors
FETH, ETHE, and Bitwise Ethereum ETF (ETHW) led the outflows on October 1st, contributing $25 million, $26.6 million, and $0.9 million in outflows, respectively. Bucking the trend were the 21Shares Core Ethereum ETF (CETH) and VanEck Ethereum ETF (ETHV), which posted inflows of $1.2 million and $2.7 million, respectively.
Despite the outflows, FETH remains the second-largest Ether ETF by total investments, holding $453.5 million. BlackRock’s iShares Ethereum Trust (ETHA) maintains its dominance, boasting over $1.14 billion in assets as of October 1st.
However, the outflow of funds from Grayscale’s ETHE, which is approaching the $3 billion level, continues unabated, casting a shadow on the market. As a result, the total investment in the US Spot Ether ETF is now in the red by $572 million, as shown in the table above.
This investor caution extends beyond Ethereum to the Bitcoin ETF market as well. On October 1st, the Spot Bitcoin ETF recorded total outflows of $242.6 million, the highest level in almost a month. Fidelity’s Wise Origin Bitcoin Fund (FBTC) took the brunt of the outflow, losing $144.7 million, followed by the ARK 21 Shares Bitcoin ETF (ARKB), which lost $84.3 million.
The outflow coincided with a period of instability in the cryptocurrency market. Bitcoin’s spot price has plummeted by nearly $4,000 due to escalating geopolitical tensions in the Middle East. However, it has since rebounded to around $61,750.
These developments raise questions about investors’ continued appetite for crypto ETFs, especially in the face of market uncertainty and regulatory scrutiny. While some industry analysts remain optimistic about the long-term prospects of these investment vehicles, recent outflows may prompt investors to take a more cautious approach in the short term. It suggests that there is.
Market participants will be watching closely the performance of crypto ETFs in the coming weeks and months, as they could provide valuable insight into changing sentiment towards digital assets and their role in the broader investment environment. I’m going to do it.
