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.
Conclusion
The launch underscores Ethereum’s growing institutional appeal, with implications for future digital asset events. Broader market factors, including Bitcoin’s movements, will influence Ethereum’s performance and price discovery. The promising demand for Ethereum ETFs indicates potential momentum, particularly ahead of significant market events like the US elections. Analysts remain optimistic about Ethereum’s institutional investment prospects and price discovery potential.
FAQs
1. What was the total trading volume for Ethereum ETFs on their first day?
Ethereum ETFs hit a cumulative trading volume of around $1.11 billion on their first day. Grayscale Ethereum Trust (ETHE) and BlackRock's iShares Ethereum Trust (ETHA) led with $469.72 million and $258.58 million, respectively.
2. How did the launch of Ethereum ETFs affect Ether's price?
Despite substantial trading volumes, Ether's price remained relatively stable. It opened around $3,521, dropped to $3,413, and recovered to about $3,466, reflecting a slight 1.6% decline over 24 hours.
3. What are analysts projecting for annual inflows into Ethereum ETFs?
Analysts project Ethereum ETFs could attract up to $6 billion in annual inflows. However, estimates vary, with JPMorgan predicting $1 billion annually and Galaxy Digital anticipating $1 billion per month.
4. How are ETF issuers attracting investors?
ETF issuers like BlackRock and 21Shares are waiving or discounting fees to attract investors. For example, 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.
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