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Ether Futures Funds Fail to Shine on Underwhelming Debut

Published October 3, 2023 10:24 AM
James Morales
Published October 3, 2023 10:24 AM
Key Takeaways
  • The first US-based Ether futures ETFs kicked off to a disappointing start.
  • Collectively, the 6 new funds generated trade volumes of $1.92 million on their first day.
  • The new funds’ trading volumes represented just 0.2% of the volume generated by the first bitcoin futures ETF upon its 2021 debut.

After gaining approval from the US Securities and Exchange Commission over the weekend, on Monday, October 2, the first US Exchange-Traded Funds (ETFs) to hold Ether futures hit the market.

But despite the fact that six new funds opened up to investors, the new generation of ETH-tracking ETFs failed to dazzle upon their debut.

Trade Volumes and AUM Disappoint on First Day

By the end of Monday, 6 newly launched Ether futures ETFs had collectively amassed a total of around $8.96M in assets under management (AUM).

Judging by their size, the most successful fund so far has been ProShares’ Ether Strategy ETF (EETH), which secured over $6M in AUM by the end of its first day.

Across the 6 funds, first-day trading volumes totaled a disappointing $1.92 million, Reuters reported .

VanEck’s Ethereum Strategy ETF (EFUT) initially benefited from a headstart, launching slightly ahead of its competitors.

However, the fund’s trading volume soon dwindled. In fact, according to the K33 Research analyst Vetle Lunde , 49% of EFUT’s day-one trade volume occurred in the first minute of trading.

Ether Futures ETF Debuts Underwhelm Compared to BTC Equivalents

To understand why analysts found the first day of ETH-tracking ETF trading so underwhelming, it’s worth comparing it to the debut of the first Bitcoin futures fund, ProShares Bitcoin Strategy ETF (BITO).

When BITO launched in 2021, its trading volume surpassed  a billion dollars in 24 hours, while it closed the day with $550M in AUM. 

To this day, BITO’s debut remains the second-most active first day of trading for any ETF. Only Blackrock’s US Carbon Transition Readiness ETF (LCTU) generated higher day-one trade volumes, with its $1.16B slightly beating BITO’s $1.02B.

In contrast, the combined launch day volumes of the new ETH-based funds represented just 0.19% of BITO’s day one volume.

The new ETH funds’ performance also looks disappointing compared to ProShares’ Short Bitcoin Strategy ETF (BITI), which launched 8 months after the asset manager debuted its flagship bitcoin fund.

Collectively, the 6 new ETH futures ETFs generated just 27% of BITI’s first-day trade volume of $7.21M.

Speculating as to why the new funds failed to live up to the initial performance of their Bitcoin-based peers, Vetle Lunde blamed  their underwhelming trade volumes on the weak performance and declining investor interest in crypto ETFs in recent months.

BITO Bitcoin ETF outflows
  BITO inflows and outflows July–October

“Activity in crypto ETFs have been extremely shallow over recent months,” he said, adding that “BITO has faced consistent outflows since mid-July.” 

In fact, BITO has seen net outflows in 9 of the 12 weeks since July 17. Overall, the fund’s AUM have dwindled by $116.45M during that time.

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