The launch of U.S. spot Ethereum ETFs has introduced fresh dynamics to the crypto investment landscape. Over the past week, these new financial instruments have displayed varied performances, with net inflows exceeding $1 billion collectively. However, Grayscale's ETHE experienced a contrasting trend, recording $1.5 billion in net outflows.
Performance Breakdown of Spot Ethereum ETFs
Approved by the SEC in May, eight issuers debuted their spot Ethereum ETFs last Tuesday. As of July 29, total trading volume reached $4.83 billion, showcasing robust market participation.
Top Performers:
- BlackRock's ETHA: Led with $1.104 billion trading volume and $500 million net inflows, maintaining ~21% market share.
- Fidelity's FETH: Gathered $244.2 million net inflows but saw its share drop from 12% to 5% due to fee structures.
- Grayscale's Mini Trust (ETH): Gained traction with a 0.15% fee (lowest among peers), attracting $164 million inflows and expanding its share from 5% to 13.6%.
Meanwhile, Grayscale's ETHE faced $1.5 billion outflows—mirroring GBTC's earlier challenges—resulting in a net $341.8 million outflow across all U.S. spot Ethereum ETFs.
Source: The Block
Comparative Analysis: Ethereum vs. Bitcoin ETFs
- Volume: Spot Bitcoin ETFs debuted with $4.5 billion daily volume (Ethereum's weekly equivalent).
- Net Inflows (ex-Grayscale): Ethereum ETFs achieved 40% of Bitcoin ETFs' post-launch performance ($117M vs. $289M).
- Market Dominance: Ethereum spot ETFs captured 99.3% of futures ETF trading volume within days vs. Bitcoin's 92.75%.
The Grayscale Factor: Will History Repeat?
ETHE transitioned from a 2017 trust to an ETF on July 23, inheriting GBTC's challenges:
- 2.5% fee vs. competitors' 0.19%-0.25%.
- Bear-market investors exited positions post-conversion.
- Mini Trust (ETH) emerged as a low-fee alternative, absorbing $164M inflows.
Key Insight: While ETHE's rapid outflows pressured Ethereum's price (briefly dipping to $3,100), recovery to ~$3,300 suggests strong buy-side support.
Analyst Perspectives:
- James Seyffart (Bloomberg): "ETHE's outflows outpaced GBTC's initial performance due to quicker discount unwinding."
- Eric Balchunas (Bloomberg): "New Ethereum ETFs show healthy inflows but face near-term headwinds from ETHE's accelerated unlocks."
FAQ Section
1. Why did Grayscale's ETHE experience massive outflows?
ETHE's 2.5% management fee and previous trust structure led investors to lower-cost alternatives like BlackRock's ETHA (0.19%) or Grayscale's own Mini Trust (0.15%).
2. How do Ethereum ETF inflows compare to Bitcoin's?
Excluding Grayscale, Ethereum ETFs attracted 40% of Bitcoin ETFs' initial net inflows—a strong start given Ethereum's smaller market cap.
3. Did ETHE's sell-off crash Ethereum's price?
Despite volatility, ETH stabilized above $3,300, indicating effective market absorption of sell pressure.
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Note: All data reflects the first week of trading post-launch. Market conditions may change.