Cryptocurrency-based investment products have been a sluggish performer throughout the month of September, failing to impress investors in the midst of a booming market.
For the first time in almost two months, Ethereum exchange traded funds (ETFs) posted a significant positive return on Tuesday. Last week, Ethereum (ETH) spot ETFs posted their sixth consecutive week of negative net flows, with outflows totaling $26.26 million.
While Bitcoin (BTC) spot ETFs continued their positive streak with inflows for the second week in a row, the CoinShares weekly report noted that products based on the second-largest cryptocurrency continued to be “outliers”.
Ethereum ETFs Record Best Day Since August
Investment products disappointed over the past thirty days, as Grayscale Ethereum Trust (ETHE) continued large outflows and newly launched ETFs lacked activity. As reported by a media outlet, investment products across all issuers saw no inflows or outflows on August 30th and September 2nd, something that has not been seen since the launch of spot cryptocurrency ETFs in the US in January.
Furthermore, trading volumes for ETH spot ETFs were comparable to those seen before their launch, representing only 15% of the volume seen during their launch week in the U.S. The disappointing performance continued as this week began. ETH-based products had one of their worst days since their launch at the end of July. Monday saw a net outflow of $79.3 million.
This was the fifth largest negative net flow day for Ethereum ETFs since inception and the worst performing day since July 31st. With the exception of ETHW’s modest $1.3 million inflow, ETHE’s outflows were led by $80.6 million, while most funds saw no activity.
However, U.S. Ethereum spot ETFs also saw one of their largest net flows on Tuesday, but in the opposite direction, noted Mads Eberhardt, senior analyst at Steno Research. ETH ETFs saw inflows of $62 million on the second day of the week, rebounding from Monday’s massive outflows.
Blackock’s ETHA led the way with $59.3 million in positive flows, while VanEck’s ETHV and Invesco’s QETH saw a small amount of $1.9 million and $1.3 million, respectively. All issuers, including Grayscale’s ETHE, also saw no outflows. This was the third best day since July. It was also the best day for spot ETH ETFs and ETHA since August 6.
SEC Delays Decision on Options on ETH ETFs
On Tuesday, the Securities and Exchange Commission (SEC) announced that it has extended the deadline for a decision on Nasdaq International Securities Exchange’s (ISE) proposed rule change for the quotation and trading of options on Blackrock’s ETHA. The US regulator also delayed its decision on the proposed rule change by NYSE American LCC for the trading and listing of options on Bitwise and Grayscale.
The deadlines have been extended to mid-November, with Nasdaq ISE expected to act on November 10 and NYSE American LCC expected to act on November 11. The decision comes on the heels of the agency’s recent approval of options trading on BlackRock’s iShares Bitcoin Trust (IBIT) on Nasdaq.
The approval was called a “big win” for spot BTC ETFs by Bloomberg analyst Eric Balchunas, who felt it would attract more investors and bring more liquidity. A similar development for Ethereum Spot ETFs could potentially help cryptocurrency-based investment products appeal to larger investors.
By Leonardo Perez