Last Updated: 5 October 2023
Despite the ongoing crypto bear market, institutional investors are demonstrating a growing interest in Ethereum (ETH). This surge in interest comes on the heels of the recent approvals and launches of several Ether Futures Exchange-Traded Funds (ETFs). In this report, we delve into the details of these ETFs and the institutional activity surrounding Ethereum.
Ether Futures ETFs Gain Traction
On October 2, six Ether Futures financial products officially entered the market. These ETFs offer institutional investors exposure to Ethereum, and they come with varying expense ratios. Here are the newly launched ETFs along with their respective net expense ratios:
- BitWise Ethereum Strategy ETF (AETH), 0.85%
- Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP), 0.85%
- ProShares Ether Strategy ETF (EETH), 0.95%
- ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE), 0.95%
- Bitcoin & Ether Market Cap Weight Strategy ETF (BETH), 0.95%
- VanEck Ethereum Strategy ETF (EFUT), 0.66%
These ETFs represent a significant development in the cryptocurrency market, offering investors diversified exposure to Ethereum.
Institutional Inflows Into Ethereum
James Butterfill, Head of Research at CoinShares Co., reported a notable institutional inflow of $13 million into Ethereum products by October 4. This marked the first net-positive week for Ethereum in the past seven weeks. However, it’s important to note that this inflow pales in comparison to the $200 million that flowed into Bitcoin during the launch of the Bitcoin Futures ETF by ProShares in 2021. This discrepancy can be attributed to the current bearish market conditions compared to the euphoric bull market of 2021.
Challenges in a Bear Market
The prolonged bear market has been evident in the flow of institutional capital. According to CoinShares data, out of the 39 weeks in 2022, institutional investors have seen 24 weeks of net-negative flows (outflows), accounting for 61.5% of the total weeks. As of October 4, Ethereum has experienced a year-to-date outflow of $101 million, while Bitcoin has seen an inflow of $219 million during the same period. However, weekly and month-to-date flows for both assets are quite similar, with $16.4 million and $12.9 million inflows for BTC and ETH, respectively.
Solana Emerges as a Frontrunner
Intriguingly, Solana (SOL) took the lead in institutional investors’ inflow during the first week of October. According to James Butterfill’s data, Solana’s financial products attracted a net capital infusion of $22.7 million. This influx of capital into Solana presents a promising opportunity for SOL investors.
Despite the prevailing bear market conditions, the launch of Ether Futures ETFs has garnered attention from institutional investors, signifying their confidence in Ethereum’s long-term potential. While the inflow into Ethereum has been comparatively modest, it reflects a positive shift in sentiment. As cryptocurrency markets continue to evolve, institutional investors are poised to play an increasingly influential role in shaping the future of digital assets.
In this dynamic landscape, where institutional investors demonstrate their conviction in Ethereum’s resilience, it becomes clear that innovative platforms like Oil Zero and Immediate Code are crucial gateways for investors seeking to participate in the crypto market’s transformative journey. These platforms provide the tools and access needed for investors to navigate the evolving world of digital assets effectively.