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Bitstamp executive noted that the Ethereum ETFs were launched in July 2024 during a period of uncertainty in risk assets, unlike the January launch of Bitcoin ETFs.
Key Notes
Spot Ethereum ETFs have seen a disappointing response compared to Bitcoin ETFs, with significant outflows and slower institutional adoption.Bitstamp's Bobby Zagotta attributes this to unfavorable market conditions and macroeconomic uncertainty at the time of launch.Despite Ethereum's steady price, institutional demand for spot Ethereum ETFs has remained low.The response to the spot Ethereum ETF launch has been underwhelming when compared to Bitcoin ETFs. While the Ether ETFs have failed to catch up with the institutional adoption, Bitstamp CEO for the Americas and global commercial chief Bobby Zagotta believes that they would have been better off with a January launch.
Speaking at the ongoing TOKEN2049 event in Singapore, Zagotta noted:
“I think they have not lived up to expectations, but I attribute that to this moment in time”.
He further added that digital assets are currently behaving as risk assets driven by macro uncertainty. Zagotta added that this “is a testament to the maturity of this market versus a year ago, two years ago even”.
The launch of the spot Bitcoin ETFs happened at the beginning of the year in January 2024. Over the course of eight months, these investment products have seen $17.5 million in net inflows so far.
On the other hand, the spot Ethereum ETFs are relatively newer and started trading seven months later in July. Within just two months of launch, these ETFs have seen more than $600 million in net outflows. The Bitstamp executive said:
“The [Ether] ETFs just launched at kind of a, call it a burdened moment, or the markets in general for risk assets. In this moment, poeple are waiting. I think they’re in the wait-and-see mode because of the uncertainty in the election, the regulatory stuff in the US, some of the sociopolitical stuff — everything is a little bit flat right now, relatively speaking.”
“So I think that affected the ETF launch. Had the Ether ETF launched when the Bitcoin ETF launched, I think it would have done better,” he added.
Ethereum ETFs Continue to Struggle
With the Ethereum ETH $2 321 24h volatility: 0.4% Market cap: $279.21 B Vol. 24h: $14.95 B price trading sideways under the $2,500 resistance, institutional demand for the asset class hasn’t grown much. As a result, the demand for spot Ethereum ETFs has also remained subdued since its launch.
Since the start of September 2024, the spot Ethereum ETFs have seen continuous outflows, with the exception of a day or two. On Wednesday, the spot Ether ETFs saw outflows of $15.1 million, with Grayscale’s ETHE leading most of the outflows, per the data from Farside Investors.
“Ethereum is more challenged now than ever before because of other alternatives that are getting a great amount of traction,” added Zagotta.
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Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.
