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Ether Spot ETF Flows Have Underwhelmed Versus Bitcoin: JPMorgan
Spot ether exchange-traded funds have seen net outflows of $500M since their launch, the report said.
Updated Aug 28, 2024, 1:58 p.m. Published Aug 28, 2024, 1:55 p.m.
- Ether spot ETFs have seen net outflows overall since their launch, said the team at JPMorgan.
- The outflows from the Grayscale Ethereum Trust were much larger than the bank had originally anticipated.
- The bank noted growing interest from asset managers for a combined ETF that gives exposure to both bitcoin and ether.
Ether spot exchange-traded funds have seen net outflows overall since their launch last month in contrast to the more successful launch of spot bitcoin ETFs earlier in the year, JPMorgan said in a research report on Wednesday.
The ether ETFs commenced trading in the U.S. on July 23, roughly six months after the bitcoin funds. In the five weeks following each launch, the ether funds suffered about $500M of net outflows while the bitcoin ETFs saw net inflows of more than $5 billion, according to the bank's team.
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The weak numbers for the ether ETFs were somewhat expected, said the bank, noting bitcoin's "first mover advantage," the lack of staking, and lower liquidity meaning less appeal to institutional investors.
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Unexpected though were $2.5 billion in outflows from Grayscale's Ethereum Trust (ETHE), which the bank had anticipated would be more like $1 billion as it converted from a closed-end fund to a spot ETF. JPMorgan noted that Grayscale has also launched a mini ether exchange-traded fund to counter the outflows from ETHE, but this ETF has only seen $200 million of inflows.
"Due to weaker demand for spot ether ETFs compared to bitcoin, there appears to be a growing interest among asset managers to file for a combined ETF that offers exposure to bitcoin and ether," the team, led by Nikolaos Panigirtzoglou, wrote.
Institutional and retail ownership of spot bitcoin ETFs was little changed from the first quarter, with retail holding about 80%, the bank said, adding that "most of the new spot bitcoin ETFs were likely bought by retail investors since their launch, either directly or indirectly via investment advisors.
Read more: Ether ETFs Have Bled Money, but That's Not the Whole Story
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- Institutional Crypto Trading Volume on CME Falls 23.5%: In March, total derivatives trading volume on the CME exchange fell by 23.5% to $175bn, the lowest monthly volume since October 2024. CME's market share among derivatives exchanges dropped from 4.63% to 3.64%, suggesting declining institutional interest amid current macroeconomic conditions.
- Bybit Spot Market Share Slides in March: Spot trading volume on Bybit fell by 52.1% to $81.1bn in March, coinciding with decreased trading activity following the hack of the exchange's cold wallets in February. Bybit's spot market share dropped from 7.35% to 4.10%, its lowest since July 2023.
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