Skip to content

Ethereum Futures ETFs Fail to Set the World on Fire: Back to Bitcoin?

Just $6.6 million worth of volume was seen across the first day of trading across nine different Ethereum ETF products, prompting some analysts to suggest investors “rotate back” into Bitcoin.

Ethereum ETF

After the rush to get Ethereum futures ETFs to market, volumes have been somewhat underwhelming to say the least, with under $7 million of trade across nine different products on Monday, the first day of trading.

While exchange-traded funds tracking ether futures were always expected to launch in early October, last week’s impending U.S. Government shutdown allegedly accelerated the process.

According to Bloomberg’s senior ETF analyst Eric Balchunas, the Securities and Exchange Commission (SEC) rushed through all open applications before the potential shutdown on 1 October, simply to clear them from their pending pile.

This meant that nine products from providers Valkyrie, VanEck, ProShares, Bitwise, Hashdex and Volatility Shares all came to market on Monday. Five of these products held only ether futures, while four held a combination of ether and bitcoin futures.

However, none of the products did volumes which could be termed a resounding success, suggesting that there was little pent-up market desire building in anticipation of the launches.

In total, the nine products saw just $6.6 million in trade, a far cry from the first bitcoin futures ETF, which pulled in $1 billion over its first two days of trading back in October 2021. Admittedly, the market is currently in somewhat of a lull, whereas there was a full-on bull run during late 2021.

The bulk of the trading which did occur on Monday was in the pre-existing Valkyrie Bitcoin Strategy ETF, which added ether to its portfolio on Monday and to its name on Tuesday, becoming the Valkyrie Bitcoin and Ether Strategy ETF.

This managed $4.6 million, or almost 70% of the day's total volume across the nine products. However, the discrepancy in the name may have caused some confusion among investors, and the fund has had two years as an existing bitcoin fund to build awareness.

Of the new products, ProShares Ether Strategy ETF saw $879,000 in turnover, and VanEck Ethereum Strategy ETF managed $516,000. Some analysts have suggested that all eyes were on the start of Sam Bankman-Fried’s trial, and hence unaware or uninterested in the launch.

However, a report from K33 research claimed that the disappointing launch suggested a current lack of institutional appetite for ETH, and that investors should “pull the brakes” on the number two cryptocurrency for now and “rotate back into BTC.”

The landscape for BTC would currently seem more favorable, with the potential for a bitcoin spot ETF being approved in the near future, and the next halving event due in mid-April next year.

The SEC has so far refused to approve any ETFs based on bitcoin spot price, although there are currently several such applications outstanding. It was also recently chastised by the U.S. Court of Appeals for denying Grayscale’s previous application to convert its Bitcoin Trust into an ETF.