Delay in Approval Impacting Ethereum ETFs
The US Securities and Exchange Commission’s ongoing postponement in approving spot Ethereum exchange-traded funds (ETFs) has led to Ethereum ETFs experiencing their largest outflows in two years. CoinShares’ latest digital asset fund report reveals that these outflows contributed to a third consecutive week of negative flows, totaling $30 million for global crypto-related investment products.
Modest Flow Stemming Outflows
James Butterfill, CoinShares’ head of research, noted that last week’s modest flow suggested a “significant stemming of the outflows.” Despite the negative sentiment, the trading volume of these products increased by 43% week-on-week to $6.2 billion, which is still considerably lower than the weekly average of $14.2 billion.
Ethereum Records Highest Outflows Since 2022
Ethereum outflows amounted to $61 million last week, the highest since August 2022. Over the past two weeks, ETH outflows have totaled $119 million, making it the worst-performing asset on a year-to-date basis, with a negative net flow of $25 million. Butterfill attributed these outflows to investors’ negative sentiment surrounding the uncertainty about when Ethereum ETF products would begin trading. Bloomberg ETF analyst Eric Balchunas noted on June 28 that approval might be delayed until the week of July 8 due to the SEC and some applicants still finalizing documents.
Bitcoin Sees Inflows Amid Ethereum’s Struggles
Bitcoin benefited from the shift in sentiment, with inflows totaling $10 million last week. The CoinShares report indicated that most Bitcoin ETF providers, including BlackRock’s IBIT and Fidelity’s FBTC, recorded modest inflows, which partially offset the $153 million outflow from Grayscale’s GBTC fund. The positive sentiment also led to $4.2 million in outflows from Short-Bitcoin positions, as BTC’s price struggles attracted significant attention from bearish traders.
Inflows for Other Digital Assets
Large-cap alternative digital assets like Solana and Litecoin saw minor inflows of $1.6 million and $1.4 million, respectively. Despite the positive sentiment for crypto this year, blockchain equities have suffered outflows of $545 million, representing 19% of Assets under Management (AuM), according to Butterfill.
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