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- Eight Ethereum ($ETH) ETFs debuted on the US stock market yesterday with $107M net daily inflows.
- Recent Mt. Gox payouts and Grayscale $ETH Trust outflows triggered a broader market slump, strengthening fear, uncertainty, and doubt (FUD) among investors.
- Despite the current dip, technical indicators suggest a potential rebound for $ETH.
$ETH ETFs debuted yesterday and have already crossed the $1B mark. While impressive, this represents just 23% of spot $BTC ETFs’ first-day trading volume ($4.66B).
The new ETFs are issued by traditional fund managers like BlackRock and Fidelity and crypto-focused companies like Grayscale, indicating the growing integration of blockchain assets into mainstream finance.
Let’s explore the potential future of $ETH ETFs and how they could affect the broader crypto market.
Eight $ETH ETFs Debut at the US Stock Market
$ETH ETFs began trading in the US on July 23, following the SEC’s approval of S-1 registration forms on Monday. Here are the products available on the stock market today and their fees:
- iShares Ethereum Trust (ETHA): 0.25%
- 21Shares Core Ethereum ETF (CETH): 0.21%
- VanEck Ethereum ETF (ETHV): 0.20%
- Fidelity Ethereum Fund (FETH): 0.25%
- Bitwise Ethereum ETF (ETHW): 0.20%
- Invesco Galaxy Ethereum ETF (QETH): 0.25%
- Grayscale Ethereum Trust (ETHE): 2.5%
- Grayscale Ethereum Mini Trust (ETH): 0.15%
The ETFs allow investors to profit by speculating on $ETH price movements without holding the token itself. Thanks to stricter regulation, this could drive crypto adoption among traditional investors due to accessibility and enhanced trust.
BlackRock today 👇 #Ethereum #ETF pic.twitter.com/czk47zzuFs
— Altcoin Daily (@AltcoinDailyio) July 23, 2024
Mt. Gox Payouts and Grayscale Outflows Trigger Market Slump
Despite a solid start, uncertainty surrounds the future value of $ETH ETFs. Mt. Gox’s 47.5K $BTC (worth approximately $3.2B) payout to one of the exchange hack victims’ wallets caused a market-wide slump in the past 24 hours:
Recent outflows from Grayscale’s $ETH Trust, worth over $484M, also contribute to the FUD. Grayscale holds over $9B worth of $ETH, making it a dominant player in the regulated $ETH investing market.
However, the combined inflows from Grayscale’s competitors outweighed the outflows, topping $590M.
Beyond market sentiment, the US political landscape and regulations could further affect the crypto market direction.
After Kamala Harris took Joe Biden’s place in the ongoing presidential race, there were reports that the Vice President might appear at the Bitcoin 2024 Conference alongside Donald Trump. If true, July 25 could clarify Harris’ stance on crypto and define the market’s trajectory.
Can $ETH Rebound to $3.7K?
Grayscale’s significant $ETH fund outflows might raise concerns, but prevailing inflows indicate an overall bullish sentiment.
Additionally, the ten-day moving average above the current price and a MACD of 44.7 hint at a potential increase in momentum and a possible rebound to $3.7K for the first time since June.
However, $ETH could continue declining for another few days, similar to how $BTC dipped after its spot ETF launch in January 2024.
Meanwhile, a 20% increase in $ETH options implied volatility (IV) highlights broader investor doubt. On a good note, a rise in long-dated call contract purchases could help $ETH see a substantial increase in the future.
UPDATE: First full day of flows for the ETHness stakes are in. The Ethereum ETFs took in $107 million. @BlackRock‘s $ETHA lead the way with $266.5 million followed by @BitwiseInvest‘s $ETHW with $204 million. Very solid first day pic.twitter.com/j28vIwVWvR
— James Seyffart (@JSeyff) July 24, 2024
Final Thoughts
While $ETH ETFs’ debut trading volume lags behind $BTC ETFs, they offer a new way for mainstream investors to diversify their crypto portfolio. Moreover, investors striving for long-term returns might see the current market dip as a buying opportunity, increasing $ETH’s odds of a rebound soon.
References
Disclaimer: The opinions expressed in this article do not constitute financial advice. We encourage readers to conduct their own research and determine their own risk tolerance before making any financial decisions. Cryptocurrency is a highly volatile, high-risk asset class.
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