Grayscale’s Ethereum Trust (ETHE) sees significant drop in outflows during second week of trading
The Ethereum Trust (ETHE) managed by Grayscale experienced a noteworthy decrease in outflows in its second week of trading. After witnessing outflows of $1.5 billion in the initial week, data from Arkham Intelligence shows that ETHE’s outflows dropped by 80% in the following week.
Factors contributing to the decline in Grayscale Ethereum outflows
On July 29, approximately 108,800 ETH valued at $367.6 million was withdrawn from Coinbase. By August 2, this number had reduced to around 24,9000 ETH, equivalent to roughly $78.4 million. Analysts at Coinbase suggest that Ethereum outflows are on a downward trend compared to what was observed with Grayscale Bitcoin Trust (GBTC) previously. While GBTC had significant outflows during a transitional period in January last year, Ethereum outflows surpassed GBTC in this recent episode.
The analysts noted, “While GBTC shares are frozen due to structural factors and cannot be sold until later in the cycle, there is no such obstacle for Ethereum.”
Trend in Ethereum outflows and performance of ETFs in the market
According to Farside data, total outflows from ETHE have surpassed $2 billion since the launch of the Ethereum spot ETF, leading to a decrease in assets under management from $9 billion to $5.97 billion. In contrast, the smaller mini-Ethereum Trust (ETH) has seen over $1 billion in assets under management, with approximately $210 million in net inflows since its inception.
Additionally, the performance of new spot Ethereum ETFs, excluding Grayscale, has been impressive. Nate Geraci, the CEO of ETF Store, highlighted that these ETFs attracted more than $1.5 billion within just two weeks, placing them among the top five ETFs launched this year.
Impact of ETFs on Ethereum price movement
Despite the significant influx of funds, the price of Ethereum has declined by over 10% in the past week, dipping below $3,000. Geraci emphasized that ETFs serve as a gateway for market entry but do not directly influence performance. He stated, “ETFs represent only a small portion of the overall market. There are many other factors driving price movements. ETFs provide access but do not control the market.”
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