Bitcoin and Ethereum ETF Outflows
According to data by SoSoValue, Ethereum exchange-traded funds (ETFs) experienced seven consecutive days of outflows, losing over $5.7 million in assets on Aug. 23. This brought the total outflows to $464 million. The cumulative net assets held in Ethereum ETFs currently amount to about $7.65 billion, with the Grayscale Ethereum Trust leading at $5 billion followed by the Grayscale Mini Ethereum Trust at $1.01 billion. Other ETFs in this space include those from Blackrock, Fidelity, Bitwise, and VanEck.
Institutional Investors’ Reluctance towards Ethereum ETFs
A note to Bloomberg by crypto analyst Noelle Acheson highlighted that institutional investors are showing reluctance towards investing in Ethereum ETFs. Many of them prefer focusing on Bitcoin for their diversification efforts. However, Acheson anticipates that Ethereum ETFs will witness increased inflows in the future, similar to the dynamic seen in the metal industry with gold ETFs having over $100 billion in assets compared to silver ETFs with less than $20 billion.
The Opportunity Cost of Ethereum ETFs
One of the reasons for the struggle of Ethereum ETFs is the opportunity cost of holding them versus purchasing Ether directly. While buyers of the cheapest Ether ETF, Grayscale Mini Ethereum, incur a small expense ratio of 0.15%, they miss out on potential earnings through staking. Data from StakingRewards indicates that staking Ethereum yields around 3%, translating to $300 on a $10,000 investment. As Ethereum’s net staking inflow has been on the rise, surpassing $93.7 billion in the last 30 days, many investors opt for holding Ether instead of Ether ETFs due to their correlation with Ethereum prices.
