The launch of spot Ethereum ETFs has yet to live up to the market’s initial optimism, as reflected in their performance over the past few weeks.
The Ethereum ETFs’ total on-chain holdings currently stand at approximately 2.81 million ETH, valued at around $7.33 billion, which accounts for about 2.3% of Ethereum’s total supply.
Despite these significant holdings, the net flows since launch have been negative, with a total outflow of 136,700 ETH.
The outflows are primarily attributable to Grayscale’s ETHE, which recorded a withdrawal of $487.88 million on the first trading day alone. Other Ethereum ETFs have seen consistent inflows, but these have not been sufficient to offset the drag from ETHE.
The market’s reaction to these outflows has been reflected in Ethereum’s price, which has struggled to maintain momentum post-launch. After an initial rise in anticipation of the ETF launches, Ethereum’s price dropped significantly, hitting a low of $2,338 on Aug. 7.
Although there has been some recovery since then, with prices hovering around $2,600, the overall sentiment remains cautious. The broader market downturn has compounded this uncertainty, leading to a lack of clear upward momentum for Ethereum.
Adding to the complexity, the Ethereum futures market has shown a marked increase in leverage ratios, signaling heightened risk-taking among traders. This spike in leverage suggests that while some investors are betting on short-term price movements, the broader sentiment remains volatile. The market’s reaction to these leveraged positions could further exacerbate price fluctuations, particularly if negative sentiment continues to dominate.
Despite these challenges, there is still a…
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