Investment In Spot Ethereum ETFs Reaches All Time Low

Institutional investments in Ethereum (ETH) through ETFs hit a significant but disappointing milestone yesterday, as no net new US dollars were added to spot Ether ETFs throughout the day on Wall Street. In related news, according to a recent report by on-chain analyst EmberCN, a sharp decline in ETH prices triggered a wave of liquidations among leveraged ETH whales.

The Difference Between Inflows And Outflows

Referred to as daily total net flow or simply flows in the crypto community, this metric tracks the total investments in spot Ether ETFs (inflows) against withdrawals (outflows) each day. The purpose of this measurement is to illustrate the impact that spot Ether ETFs, which are different compared to other investment options like direct purchases or derivatives, have on the daily price of ETH.

Calculations are usually in US dollars and encompass all buying and selling activities across the nine spot Ether ETFs available on US exchanges, managed by sponsors such as BlackRock, Fidelity, Bitwise, 21Shares, Franklin, VanEck, and two Grayscale offerings.

More Net Outflows

Ether ETF flows have fallen short of expectations. The $0 figure reported on Monday sharply contrasts with optimistic forecasts by bullish investors who anticipated spot Ether ETFs would signal a wave of institutional adoption, with price predictions reaching as high as $15,000 per ETH. Currently, ETH trades around $2,450, which is about half of its peak value.

In the first quarter following the introduction of various Bitcoin (BTC) spot ETFs, bitcoin saw inflows exceeding $12 billion. In comparison, Ether has unfortunately recorded net outflows since its ETFs launched. Notably, Wall Street entities had initially funded the nine spot Ether ETFs with $10.2 billion, most of which originated via Grayscale, creating a pool of capital that could be withdrawn.

An Intriguing Opportunity

Taking advantage of the aforementioned situation, investors have consistently withdrawn funds through the spot Ether ETFs since their US introduction, leading to a total of $548 million in net outflows since July 23rd. Several factors influence investors and their decisions to no longer invest capital into spot Ether ETFs.

A significant reason for their lackluster performance could be the absence of yield in these ETFs. Also, while large ETH holders can earn a 3.3% yield through Proof-of-Stake (PoS), most Ether ETFs do not offer any yield and instead charge management fees.