Ethereum ETF Volume Reaches $1.11 Billion in First-Day Trading Frenzy

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Ethereum ETFs: A Market Analysis

Ether ETFs in the U.S. hit a cumulative trading volume of around $1.11 billion on their first day. The Grayscale Ethereum Trust (ETHE) and BlackRock’s iShares Ethereum Trust (ETHA) led with $469.72 million and $258.58 million, respectively. Fidelity’s Ethereum Fund (FETH) and Bitwise’s Ethereum ETF (ETHW) followed, recording $137.88 million and $94.34 million. Other ETFs, including VanEck and Invesco, saw less than $50 million each.

Early trading saw $112 million in inflows within the first 15 minutes, reaching $600 million in volume after three hours. Bitwise captured $25.5 million in the initial quarter-hour, just behind Grayscale’s ETHE. BlackRock led with $266.55 million in inflows, while Bitwise, Fidelity, and others saw significant yet lesser amounts. Grayscale’s ETHE experienced a negative net inflow of -$484.11 million, resulting in a daily total net inflow of $106.78 million.

Analysts project Ethereum ETFs could attract up to $6 billion in annual inflows, with contrasting estimates from JPMorgan at $1 billion and Galaxy Digital anticipating $1 billion per month. 

Despite the substantial trading volumes, Ether's price remained stable, trading under $3,500. It opened around $3,521, dropped to $3,413, and recovered to about $3,466, reflecting a slight 1.6% decline over 24 hours.

As per QCP Capital, the muted price reaction is linked to a “buy the hype, sell the news” sentiment and significant Bitcoin movements by the US government and Mt. Gox. The options market saw increased caution, with notable activity predicting short-term volatility. Large transaction volumes surged by 145%, with transactions over $100,000 up by 45%. Traders foresee initial ETH inflow effects appearing 2-3 weeks post-launch, expecting sideways movements with potential corrections.

ETF issuers like BlackRock and 21Shares have waived or discounted fees to attract investors. BlackRock’s fee is set at 0.12% for the first 12 months or until $2.5 billion in net assets, increasing to 0.25% afterward. Grayscale and Invesco have similar tiered structures. BlackRock and Fidelity are anticipated to dominate the Ethereum ETF market, while Bitwise has committed 10% of its spot Ether profits to Ethereum developers.