Multiple Ethereum futures exchange-traded funds (ETFs) made their debut in the United States. On October 2, 2023, a coalition of investment firms, which includes ProShares, VanEck, Bitwise, Valkyrie, Kelly, and Volshares, collectively introduced a total of nine ETFs on the Chicago Board Options Exchange (CBOE). Among these ETFs, five are exclusively comprised of Ether futures, while the remaining ones consist of a mix of Bitcoin and Ethereum futures contracts.
Despite the initial excitement surrounding these products, they failed to make a substantial impact. On the first day of trading, all nine ETFs collectively recorded trading volumes of less than $2 million. The most popular among these futures ETFs was Valkyrie’s BTF, which tracks a combination of Bitcoin and Ether. It achieved a total trading volume of $882,000.
Additionally, these Ethereum futures ETFs made up just 0.2% of the overall trading activity, a substantially lower figure when compared to the trading volume of Bitcoin futures. To illustrate, the ProShares Bitcoin Strategy ETF (BITO), introduced in the fourth quarter of 2021 during a bullish crypto market, accumulated more than $1 billion in trading volume on its inaugural day.
As a result, numerous market experts pointed out the underwhelming performance of Ethereum. Eric Balchunas, a senior analyst specializing in ETFs at Bloomberg, shared his perspective on the matter, describing it as a relatively disappointing day in relation to trading volume.
Ethereum’s Grip on Institutional Investors: Weakening or Waning?
Numerous observers have gone so far as to imply that institutional investors may be losing interest in Ethereum. Nevertheless, it’s crucial to recognize that this pattern has been in motion for a while. In September, Ethereum saw substantial outflows, and it presently holds the position of being the most divested digital asset by prominent entities, with annual sales reaching $114 million. Consequently, analysts have characterized it as the least preferred digital asset among exchange-traded product (ETP) investors.
Balchunas appears to hold a somewhat similar viewpoint, stating,
“Unprecedented day today with multiple ETFs all launching at the same time. No clear winner has emerged, all of them were pretty average, lower than I would have predicted, but its the long run, and remember, these hold futures (ETF investors much prefer physical to derivatives).”
Moreover, ETH was one of the cryptocurrencies that faced setbacks today, witnessing a daily drop of 4%, a figure significantly greater than that of other digital assets. At the time of this report, the cryptocurrency was trading at $1,662.64. This development also led to a substantial increase in long position liquidations, with the ETH market seeing an astonishing $26.24 million in long positions liquidated out of a total of $28.83 million.