Grayscale ETHE unlock tide, where will the funds of ETH Square ETF finally flow?

Source: Blockchain Knight

In the first month of the listing of SpotETH ETF in the US, it recorded a net outflow of 476 million US dollars. Obviously, it did not overcome the capital outflow caused by the listing of Grayscale ETHE.

Bloomberg’s senior ETF analyst Eric Balchunas has expressed some personal views on this: “The momentum of the 9 newly listed SpotBTC ETFs is good, and their inflows are sufficient to significantly offset the large outflows of GBTC.”

The performance of Spot Ether ETF is in stark contrast to the BTC ETF at the time, which received a inflow of nearly $5 billion in a similar period after its launch.

Analysts attribute this gap to several factors: BTC has the so-called “first mover advantage”, the lack of market monitoring options for ETH ETFs, and lower liquidity in the ETH market, all of which have greatly reduced the attractiveness of ETFs to institutional investors.

Despite some challenges, some ETH ETFs did show signs of recovery at the end of last month.

Balchunas added that capital outflows will not continue indefinitely, and the inflows of newly launched ETFs will eventually catch up with the outflows.

According to Farside Investors’ data, Grayscale’s ETHE reduced by nearly $2.6 billion in the first month. This is not surprising, as its BTC trust fund GBTC has also experienced a similar situation.

Although the inflow of other ETH blockchain ETFs is not enough to ensure positive net flows on a monthly basis, the amount of cash flowing into these crypto products is still quite substantial.

BlackRock’s ETHA inflows have exceeded $1 billion, making it the seventh largest ETF year to date.

Fidelity’s FETH also recorded a large inflow of about $393 million, making it the 19th largest ETF so far this year.

Bitwise’s ETHW is the third and final ETH-based ETF traded in the United States, which has successfully captured over 300 million dollars of inflows in the first year.

In addition, despite a significant outflow of funds from Grayscale’s ETHE, its Ethereum Trust Fund (ETH) successfully captured an inflow of nearly $240 million.

If the total inflows of the ETH blockchain ETF traded in the United States are treated as a product, it will be the fourth largest ETF by 2024.