Outflows from Spot Ethereum ETFs

Investing.com – Spot Ethereum exchange-traded funds (ETFs) experienced outflows of $14 million in the U.S. over the past week, according to Barclays analysts in a Monday report.

The outflow occurred despite a 2.19% increase in the price of ether, the cryptocurrency linked to spot Ethereum funds.

Key Highlights

• The withdrawals were primarily due to outflows from Grayscale’s Ethereum Trust (NYSE:ETHE), which saw $118 million leave the fund. However, this was slightly offset by a $2 million inflow into Grayscale’s Ethereum Mini Trust (NYSE:ETH), the second-largest spot ether ETF by net assets.
• Barclays analysts stated, “Grayscale saw an outsized portion of the outflows from their Ethereum trust, though this was offset slightly by inflows into their mini Ethereum trust.”
• The VanEck Ethereum ETF (NYSE:ETHV) also reported $8 million in net outflows, contributing to the overall negative trend. In contrast, Blackrock’s iShares Ethereum Trust ETF (NASDAQ:ETHA) recorded the strongest inflows with $76 million, followed by Fidelity Ethereum Fund (NYSE:FETH) which brought in $26 million.

Impacts on Coinbase

The analysts indicated the potential implications for Coinbase (NASDAQ:COIN), which serves as the custodian and prime broker for six of the ETFs and eight spot Bitcoin ETFs. They mentioned that:
– “Coinbase could benefit from growth in AUM and redemption/creation activity, though the company could also face heightened competition for trading volumes.”

Overall Trading Volumes

Barclays noted that while trading volumes across ETF products remain relatively small compared to on-exchange crypto volumes, they consistently represented about 2% of spot crypto trading volumes over the past week.

Conclusion

This note will be the last weekly publication monitoring Ethereum ETF flows, as Barclays will shift focus to their crypto monthly report, including Bitcoin ETF flows.

Nine spot Ethereum ETFs launched on July 23, marking the second set of funds linked to a major cryptocurrency’s price, following the launch of spot Bitcoin ETFs earlier on January 11 after nearly a decade of pushback from the SEC against such products.