Ethereum

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Following its unexpected approval by the United States Securities and Exchange Commission (SEC), the spot Ethereum ETFs (exchange-traded funds) became one of the most important narratives in the cryptocurrency space. However, the <a href="https://bitcoinist.com/blackrock-altcoins-xrp-solana/" target="_blank" rel="noopener noreferrer nofollow">crypto investment products</a> seem not to be living up to the hype after an underwhelming trading debut in the past week.
<h2 id="b-grayscale-responsible-for-heavy-spot-ethereum-etf-outflows-b">Grayscale Responsible For Heavy Spot Ethereum ETF Outflows</h2>
On Friday, 26th of July, the recently-launched spot Ethereum ETFs <a href="https://sosovalue.com/assets/etf/us-eth-spot" target="_blank" rel="noopener noreferrer nofollow">posted</a> another day of significant outflows, marking the third consecutive day of withdrawals from these products. The exchange-traded products, which launched on Tuesday, July 23, recorded a net outflow of roughly $341 in the opening week.
According to data from SoSoValue, the spot Ethereum ETF market launched on a high note, posting a net inflow of approximately $106.8 million on day one. This first-day performance was deemed a “solid start” by market experts, especially in comparison to the launch of the Bitcoin ETFs earlier in the year.
However, the spot Ethereum ETFs followed up with a “red day”, with over $133 million flowing out of the products on Wednesday, July 24. This was also followed by $152 million and $162 million net outflows on Thursday, July 25, and Friday, July 26, respectively.
<img fetchpriority="high" decoding="async" class="aligncenter wp-image-312397 size-large" src="https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?resize=980%2C502" alt="Spot Ethereum ETFs" width="980" height="502" srcset="https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=2092 2092w, https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=640 640w, https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=768 768w, https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=980 980w, https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=1536 1536w, https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=2048 2048w, https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=750 750w, https://bitcoinist.com/wp-content/uploads/2024/07/Screen-Shot-2024-07-28-at-03.27.37.png?w=1140 1140w" sizes="(max-width: 980px) 100vw, 980px" data-recalc-dims="1">
Source: <a href="https://sosovalue.com/assets/etf/us-eth-spot" target="_blank" rel="noopener noreferrer nofollow">SoSoValue</a>
It is worth noting that Grayscale’s ETH Trust exchange-traded fund ETHE, specifically, has been responsible for a significant percentage of the <a href="https://bitcoinist.com/wall-street-ethereum-spot-etfs/" target="_blank" rel="noopener noreferrer nofollow">capital outflow</a>. On Friday, the fund saw a single-day outflow of over $356 million. Since the spot Ethereum ETFs, the Grayscale product has recorded a cumulative net inflow of $1.51 billion.
Interestingly, the price of Ethereum has largely struggled following the launch of the Ether ETFs. According to data from CoinGecko, the “king of altcoins” has declined in value by more than 7% in the past week. As of this writing, the ETH price stands at around $3,248, reflecting a 1.1% dip in the past day.
<h2 id="b-new-money-inflow-less-impactful-on-eth-b">New Money Inflow Less Impactful On ETH</h2>
According to CryptoQuant’s latest report, the influx of fresh capital, such as ETFs, has a less significant impact on Ethereum than on Bitcoin. This observation is based on a metric called the “realized capitalization multiplier.”
Recent data <a href="https://cryptoquant.com/community/dashboard/66a38bd1e52ef56ab46484dc?utm_source=telegram&amp;utm_medium=sns&amp;utm_campaign=dashboard&amp;utm_content=crypto-weekly-report" target="_blank" rel="noopener noreferrer nofollow">shows</a> each dollar of fresh money invested in Bitcoin has the potential to increase BTC’s market capitalization by $5. Meanwhile, the effect is much lower for Ether, whose market cap would only increase by $1.3 for each invested dollar.
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">
 In 2024, every $1 invested in <a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">#Bitcoin</a> increased its market cap by $5, while for ETH, it was only $1.3.
 New money flows have a weaker effect on <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">$ETH</a> than Bitcoin. <a href="https://t.co/CtAmmMVL8g" rel="noopener noreferrer nofollow" target="_blank">pic.twitter.com/CtAmmMVL8g</a>
 — CryptoQuant.com (@cryptoquant_com) <a href="https://twitter.com/cryptoquant_com/status/1816907303029010630?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow" target="_blank">July 26, 2024</a>
</blockquote>
This revelation suggests that ETH’s multiplier effect has been significantly lower than that of Bitcoin so far in 2024.
<img decoding="async" class="aligncenter size-medium" src="https://www.tradingview.com/x/reD1nU4Z/" alt="Spot Ethereum ETFs" width="1832" height="1314">

Spot Ethereum ETFs Up To A Slow Start, Record $341 Million Net Outflow In First Week

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