Barclays Analysis: $14 Million Leaves Spot Ethereum ETFs Despite Price Increase
In a recent note by Barclays analysts, it was revealed that $14 million exited regulated spot exchange-traded funds (ETFs) in the United States over the past week. This occurred even as the price of ether, the cryptocurrency that spot Ethereum funds track, rose by 2.19% during the same period.
The primary reason for the outflows was withdrawals from Grayscale's Ethereum Trust, with $118 million leaving the fund. However, there was a $2 million inflow into Grayscale's Ethereum Mini Trust, the second-largest spot ether ETF by net assets, which helped offset some of the downturn.
VanEck Ethereum ETF recorded $8 million in net outflows, while Blackrock's iShares Ethereum Trust ETF saw the strongest inflows at $76 million, followed by Fidelity Ethereum Fund with $26 million.
Analysts pointed out the implications for Coinbase, which acts as the custodian and prime broker for six of the ETFs and eight spot ETFs. They mentioned that Coinbase could benefit from growth in assets under management (AUM) and redemption/creation activity, but could also face increased competition for trading volumes.
Despite the relatively small trading volumes across ETF products compared to on-exchange crypto volumes, they consistently represented about 2% of spot crypto trading volumes over the past week.
Barclays announced that this would be the last weekly publication tracking Ethereum ETF flows, as they are shifting focus to their monthly crypto report, which includes Bitcoin ETF flows.
The launch of nine spot Ethereum ETFs on July 23 marked the second set of funds tied to the current price of a major cryptocurrency. Spot Bitcoin ETFs entered the market earlier on January 11, after years of resistance from the Securities and Exchange Commission (SEC) against such products.
In conclusion, the movement of funds in and out of spot Ethereum ETFs can provide insights into investor sentiment and market trends. It is essential for investors to stay informed about these developments to make informed decisions about their financial portfolios.