he Ethereum ETFs are relatively new entrants in the crypto investment market, although they met some challenges at the start, they have not been able to scale as fast as Bitcoin ETFs. However, they are still within the list of 25 fastest-growing ETPs of 2024.
Market Performance Overview
BlackRock’s ETHA is leading the way as the industry leader with accumulated net inflows of $1.45 billion. In second place is Fidelity investment that recently launched its FETH with $498 million and Bitwise has ETHW with $321 million. However, it is important to note that the total net flows are still negatives standing at $500 million with the strongest factor being the selling pressure from Grayscale Ethereum Trust.
Launch Timing Impact
According to Hunter Horsley, who is the CEO of Bitwise, the slow start was caused by multiple factors, most specifical timing, where the crypto market suffered a drawdown when the ETF was launched during the summer, which is historically not the best performing months for the crypto market. On the other hand, the Bitcoin ETF was launched during a glowing bull market that helped Bitcoin ETFs perform better.
Staking Considerations and Future Outlook
One of the biggests issues regarding the SEC regulation of U.S. ETFs is The absence of staking features in the U.S. ETFs. However, according to Horsley this is not s significant issue that could have repurcutions on the performance and potential of the ETH ETF as the majority of ETH holders do not stake.
ETH ETFs: Growing Past Hurdles
However, as will be discussed, there are some fundamental strengths for future growth for Ethereum ETFs despite the current challenges, that many argue are related to a timing issue. According to Horsley, such products belong to the initial stage of a business ecosystem and, therefore, they can expand greatly in the future as the ecosystem develops and matures.
