Coinspeaker
Ethereum Futures ETFs Underwhelm on First Day of Trading
The highly anticipated launch of nine new Ethereum futures exchange-traded funds (ETFs) has come to a seemingly underwhelming end. The new products went to market on October 2 and are designed to track futures contracts tied to the value of the cryptocurrency Ethereum.
Five of the nine funds hold Ether futures only, while the remaining four track a mixture of Bitcoin and Ether futures contracts. For all the excitement that followed news of the approval of the investment vehicles does not seem to have translated into actual investment. According to analysts, the ETFs’ combined initial trading volumes were low.
In a post on social media platform X, Bloomberg analyst Eric Balchunas described Monday’s trading volumes as “pretty meh”, adding that the funds performed lower than he would have predicted.
Unprecedented day today with multiple ETFs all launching at same time. No clear winner has emerged, all of them were pretty average, lower than I would have predicted, but its a long run and remember, these hold futures (ETF investors much prefer physical to derivatives) https://t.co/fKGOv8T7pP
— Eric Balchunas (@EricBalchunas) October 2, 2023
By mid-day, the ETFs had seen less than $2 million in trading volume. According to the analyst, this was “about normal” for a new ETF but low when compared to BITO, the first Bitcoin futures ETF, which did $200 million in the first 15 minutes of trading. It is important to note that the ProShares Bitcoin Strategy ETF was launched during the October 2021 bull run. It traded more than $1 billion worth of volume on its first day.
However, Balchunas pointed out that the trading volume was “quite a lot” compared to traditional finance ETF launches. He also stated that generally, investors are more drawn to spot ETF products over futures. He also explained that by scheduling all the ETFs to launch on the same day, the US Securities and Exchange Commission (SEC) was trying to prevent any single fund from gaining market dominance.
Valkyrie’s BTF, which tracks both Bitcoin and Ether emerged as the most popular product with a total of $882,000 worth of volume. The fund had already been trading as a Bitcoin-only futures ETF before Valkyrie received approval to convert it into a two-for-one investment vehicle by combining Bitcoin and Ether futures contracts into one contract. The asset manager was the first out of the nine funds to be greenlit for the Ether futures ETF.
VanEck’s Ethereum Strategy ETF (EFUT) traded almost 25,000 shares at about $17 each for a total volume worth $425,000.
The crypto community remains anxious for the SEC decisions on pending spot Bitcoin and spot Ether ETFs. Bitwise CIO Matt Hougan stated that he expects “we’ll see a spot Bitcoin ETF this calendar year,” while VanEck CEO Jan van Eck said that “it looks like early in 2024 we will probably see a spot product.”
