The much-anticipated launch of nine new Ethereum Futures ETFs has generated limited investment interest in comparison to the initial excitement surrounding their introduction. On October 2nd, these nine ETF products made their debut, with the primary aim of tracking futures contracts linked to the value of Ethereum’s native cryptocurrency, Ether (ETH). Among these ETFs, five are exclusively focused on Ether futures, while the remaining four track a combination of Bitcoin (BTC) and ETH futures contracts.
Ethereum Futures ETFs recorded about $2 million in one day
Eric Balchunas, a senior Bloomberg ETF analyst, expressed his sentiments on the launch, describing it as a “pretty meh day of volume” in a tweet. In total, all nine Ethereum Futures ETFs collectively recorded trading volumes of less than $2 million during the first day of trading, as of midday Eastern Time. Among these new ETF products, the most popular was Valkyrie’s Bitcoin Strategy ETF, which tracks a combination of Bitcoin and Ether. It accumulated a total trading volume of $882,000. Notably, this ETF had previously been trading as a Bitcoin-only futures ETF since October 2021 but adjusted its strategy to include exposure to ETH.
Comparing the first-day trading volumes of Ethereum Futures ETFs to the ProShares Bitcoin Strategy ETF’s debut in October 2021 reveals a stark difference. The Bitcoin Strategy ETF, launched during a booming period for crypto assets, witnessed over $1 billion in trading volume on its initial day. However, Balchunas offered some perspective, noting that when compared to traditional finance ETF launches, the trading volume seen on the first day was actually “quite a lot.” He also pointed out that investors typically favor spot ETF products over those based on futures.
Challenges in the crypto ETF landscape
Balchunas shed light on the coordinated launch of all these products on the same day. The U.S. Securities and Exchange Commission (SEC) orchestrated this simultaneous release to prevent any single fund from gaining market dominance. Despite the competitive landscape and various U.S. firms vying for prominence in the emerging Ether futures market, ETF firm Volatility Shares decided to cancel its plans to list a similar product. The company explained that it “didn’t see an opportunity” at the present moment.
The launch of these Ethereum futures ETFs marks a significant development in the cryptocurrency investment space. It reflects the growing interest among investors in gaining exposure to cryptocurrencies through regulated investment vehicles. However, the initial trading volumes suggest that while there is enthusiasm for these products, they have yet to attract substantial investment dollars compared to their Bitcoin counterparts. It remains to be seen how these ETFs will perform in the evolving landscape of cryptocurrency investments.
