Last updated on October 5, 2023
Ethereum futures ETFs have finally arrived in the cryptocurrency investment space, with their highly anticipated debut on October 2. These exchange-traded funds were specifically designed to track futures contracts linked to the value of Ether, the native currency of Ethereum. However, the initial trading activity for these ETFs suggests that market enthusiasm did not necessarily translate into significant investment dollars, especially when compared to the launch of their Bitcoin counterparts.
Out of the nine ETF products introduced, five exclusively track Ether futures contracts, while the remaining four combine both Bitcoin and ETH futures. Despite high expectations, the first day of trading saw relatively subdued volume. Senior Bloomberg ETF analyst Eric Balchunas described the debut as a “pretty meh day of volume,” with the total trading volume for Ether ETFs amounting to just under $2 million. While this figure is considered normal for a new ETF, it pales in comparison to the impressive performance of the ProShares Bitcoin Strategy ETF (BITO), which saw $1 billion in trading volume on its first day. This stark difference between Bitcoin and Ethereum ETF launches highlights the disparity between the two cryptocurrencies.
Among these new Ether ETFs, Valkyrie’s bitcoin-ether blend ETF stood out, recording nearly $800,000 in trading volume on its first day. Valkyrie’s ETF had previously been trading as a Bitcoin-only futures ETF since October 2021 but adjusted its strategy to include exposure to Ethereum. This move seems to have paid off, as it garnered significant attention from investors. However, despite the tepid debut of Ether ETFs, Balchunas pointed out that the trading volume witnessed was still substantial compared to traditional finance ETF launches. Nevertheless, investors generally prefer spot ETF products, which offer direct ownership of the underlying asset, rather than those based on futures contracts.
The launch of these nine new Ethereum futures ETFs generated modest trading activity on their first day, falling far short of the meteoric rise witnessed by Bitcoin ETFs like BITO during their debut. While it remains to be seen how these ETFs will perform in the coming weeks and months, their initial reception suggests that the investment community may still favor traditional spot ETFs over those tied to cryptocurrency futures.
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