Ether exchange-traded funds (ETFs) had a rough start in their debut week, experiencing $340 million in outflows as investors pulled their money out of the Grayscale Ethereum Trust (ETHE) in favor of competing products. This is in stark contrast to bitcoin ETFs, which saw $1 billion in net inflows during their first four days on the market despite facing similar outflows from a different Grayscale fund.
The lackluster performance of the ETH ETFs seemed to have an impact on the price of ether, which dropped 5% last week while bitcoin gained 2%. However, it wasn’t all bad news for ether ETFs, as other newly listed products from BlackRock, Bitwise, and Fidelity managed to attract $1.15 billion in inflows.
Analysts are closely watching the outflows from ETHE, with some predicting that the fund could run out of assets in the next four weeks if the current pace continues. However, there is optimism that the outflows may start to taper off soon, following a similar pattern seen with the Grayscale Bitcoin Trust (GBTC) back in January.
Quinn Thompson, founder of digital asset hedge fund Lekker Capital, pointed out that ETHE has already shed a significant amount of assets, similar to what GBTC experienced before bitcoin’s rally to new all-time highs. Mads Eberhardt, a senior crypto analyst at Steno Research, believes that ETHE outflows could start to subside this week, leading to a potential rebound in the future.
While the initial outflows may be concerning, there is hope that ether ETFs will see a turnaround in the coming weeks. Investors will be keeping a close eye on the market to see if the trend reverses and funds start to flow back into these products.