The US Securities and Exchange Commission has continued to delay the approval of spot Ethereum exchange-traded funds (ETFs) for trading, leading to the most significant outflows in two years for Ethereum ETFs. According to CoinShares’ digital asset fund report, this resulted in a third consecutive week of negative flows of $30 million for global crypto-related investment products. Despite this, there was a slight improvement in outflows last week, indicating a potential stabilization in the market.
Ethereum saw its highest outflows in two years, reaching $61 million last week. Over the past two weeks, total outflows for ETH amounted to $119 million, making it the worst-performing asset year-to-date with a negative net flow of $25 million. James Butterfill, Coinshares head of research, attributed these outflows to investors’ negative sentiment regarding the uncertainty surrounding the approval of Ethereum ETF products for trading.
Bitcoin, on the other hand, experienced inflows totaling $10 million last week, benefiting from the shift in sentiment. Most Bitcoin ETF providers recorded modest inflows, partially offsetting the $153 million outflow from Grayscale’s GBTC fund. Additionally, there were $4.2 million in outflows from Short-Bitcoin positions, suggesting that bearish traders may have turned their attention to BTC due to its recent price struggles.
Large-cap alternative digital assets like Solana and Litecoin also saw minor inflows of $1.6 million and $1.4 million, respectively. However, blockchain equities have suffered significant outflows of $545 million this year, representing 19% of Assets under Management (AuM). Despite the positive sentiment surrounding crypto this year, blockchain equities have not fared as well.
Overall, the delay in the approval of Ethereum ETFs by the SEC has had a significant impact on the outflows for Ethereum ETFs and the overall sentiment in the crypto market. While Ethereum has seen the highest outflows in two years, Bitcoin has benefited from the shift in sentiment, recording inflows last week. Despite the challenges in the market, there are still opportunities for investors to capitalize on inflows in other digital assets like Solana and Litecoin.
