Investors in the cryptocurrency space are noticing the similarities between Ethereum’s current price movement and that of Bitcoin after the approval of its ETFs. Following the approval of nine Ethereum ETFs by the US Securities and Exchange Commission (SEC), Crypto commentator Croissant pointed out that Bitcoin saw an immediate drop in price before experiencing a surge a couple of months later. This observation comes as Ethereum ETFs enter their second week of trading after the approval, with Grayscale’s ETHE fund weighing on the overall market compared to other players.
Croissant noted that Ethereum’s price movement could be mirroring that of Bitcoin, with Ether’s price dropping by 8% within two days and 20% within the first two weeks after the ETF approval. However, he suggests that Ethereum might see a similar decline before potentially surging in price, as Bitcoin did, seeing a 90% increase within months of its ETF approval. The trading of Ethereum ETFs began on July 23, almost six months after Bitcoin ETFs were introduced, and the performance has been closely monitored by analysts and investors.
During the first week of trading, Ethereum saw a 6% drop in price according to CoinGecko data, but Bloomberg recorded $1.17 billion in flows just four days after the ETFs began trading on July 26. However, Grayscale’s Ethereum Trust (ETHE) saw cumulative net outflows nearing $500 million on July 29, while Bitcoin ETFs saw cumulative inflows of $17 billion on the same day. This could be due to the high fees associated with ETHE, which could be a major factor for investors.
Despite challenges faced by Grayscale’s ETHE fund, other Ethereum ETFs saw positive flows during the first week of trading, with BlackRock’s iShares Ethereum Trust (ETHA) attracting $500 million in net inflows during the first five days. Analysts believe that the 2.5% fees for ETHE could be a deterrent for investors, as other competitors offer lower fees ranging from 0.15% to 0.25%. Grayscale’s ETH fund, on the other hand, debuted with a lower 0.15% fee and attracted $168.9 million in inflows.
As Ethereum ETFs enter their second week of trading, analysts predict that ETHE outflows could ease, potentially leading to a more positive performance for the fund. Despite some challenges faced during the first week of trading, Ethereum continues its annual rise of over 70%, solidifying its position as the second-largest cryptocurrency after Bitcoin. With significant inflows seen in several Ethereum ETFs, including BlackRock’s ETHA and Bitwise’s Ethereum ETF (ETHW), the market remains optimistic about the future performance of these funds.
