Ethereum ETFs See Seven Consecutive Days of Outflows, Shedding $5.7M in Assets

Cumulative net assets locked in these Ethereum (ETH) ETFs stand at about $7.65 billion.

Spot Ethereum exchange-traded funds, or ETFs, had seven consecutive days of outflows shedding over $5.7 million in assets on Friday, Aug. 23, bringing the cumulative figure to $464 million, data by SoSoValue shows.

The total net assets locked in these Ethereum (ETH) ETFs stand at about $7.65 billion.

Of the total, the Grayscale Ethereum Trust has $5 billion followed by the Grayscale Mini Ethereum Trust with $1.01 billion. It is followed by ETFs from Blackrock, Fidelity, Bitwise, and VanEck.

Institutional investors’ reluctance

In a note to Bloomberg, crypto analyst Noelle Acheson highlighted that many institutional investors are showing a preference for Bitcoin (BTC) over Ethereum ETFs for their diversification efforts.

However relatedly, she anticipates that Ether ETFs will likely see more inflows in the future, comparing the scenario to the metal industry, where gold ETFs hold over $100 billion in assets while those tracking silver have less than $20 billion.

The opportunity cost

Another factor that might be contributing to the lackluster performance of Ethereum ETFs is the opportunity cost of holding them vis-a-vis buying Ether.

While buyers of the cheapest Ether ETF — Grayscale Mini Ethereum — will pay a small expense ratio of 0.15%, they will also be unable to earn any rewards from staking Ether.

Data by StakingRewards shows that Ethereum yields about 3% or $300 if you invest $10,000 in it.

The data shows that Ethereum’s net staking inflow has risen in 20 of the last 30 days, reaching over $93.7 billion. Hence, many investors are opting for Ether, given that Ether ETFs track Ethereum prices.

Ethereum is underperforming Bitcoin

Another possible reason for the poor performance of Ethereum ETFs might be related to the fact that Bitcoin is outperforming Ether this year.

Bitcoin has risen by over 45% while Ether is up by less than 20%.

This performance might be linked to the stiff competition that Ethereum is facing from Solana (SOL) and Tron (TRX).

Tron has become a major player in stablecoin transactions, handling daily volumes of over $40 billion. Similarly, Solana has seen immense popularity due to its meme coins. As a result, in July, Solana was the biggest chain in DEX volumes, handling over $58 billion.

The performance of Ethereum ETFs will likely serve as a key indicator for financial services companies considering launching other altcoin ETFs like Solana and Avalanche.

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