Spot Ethereum ETFs made their debut in the United States on July 23, and the results were mixed for the leading crypto asset manager, Grayscale.
Grayscale’s Ethereum Trust (ETHE) experienced a significant loss of $484 million on the first day of trading. This drop in assets under management may continue, potentially resulting in a loss of around $4.5 billion worth of Ethereum.
Investors are withdrawing from the fund due to the opportunity to realize profits on the premium gap that existed before the transition to a spot-based ETF. Additionally, the high 2.5% fee of ETHE compared to other funds with lower fees may be causing reallocation of investments.
To address this issue, Grayscale introduced the Ethereum Mini Trust (ETH) with a lower 0.15% fee and a $1 billion AUM starter. The ETH fund saw an inflow of $15 million on its first day of trading, according to preliminary data from Farside Investors.
Overall, there was an inflow of $106 million across all nine ETF providers. Bloomberg ETF analyst James Seyffart described it as a “very solid first day” for the Ethereum ETFs.
Leading the pack was BlackRock’s ETHA fund with $266.5 million in inflows, followed by Bitwise ETHW with $204 million. Fidelity FETH saw $71 million in inflows, while other providers had minor inflows ranging from $7.5 million to $13 million.
Despite the ETF launches, Ethereum’s price did not experience a significant pump in the markets. The asset reached an intraday high of $3,534 before dropping to just over $3,400. As of Wednesday morning, Ethereum was trading at $3,430.
Analysts predict that ETH prices may dip below $3,000 in the short term following the ETF launches, but they anticipate a new all-time high in the long run as institutional investors take advantage of this new trading opportunity.
