Grayscale’s Ethereum Trust (ETHE) Sees Significant Drop in Outflows
In its second week of trading, Grayscale’s Ethereum Trust (ETHE) experienced a sharp decline in outflows after a staggering $1.5 billion outflow in its first week. According to data from blockchain analytics firm Arkham Intelligence, ETHE’s outflows decreased by 80% entering its second week.
Reasons for the Decrease in Grayscale Ethereum Outflows
On July 29, approximately 108,800 ETH, valued at $367.6 million, was withdrawn from Coinbase. By August 2, this figure had dropped to around 24,900 ETH, equivalent to $78.4 million. Analysts at Coinbase noted that Ethereum outflows have been on a declining trend when compared to past observations of Grayscale Bitcoin Trust (GBTC).
Despite experiencing significant outflows during the January transition period last year, GBTC’s outflows were surpassed by that of Ethereum. Coinbase analysts highlighted that while GBTC shares are subject to structural restrictions, Ethereum does not face such limitations.
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Since the launch of the Ethereum spot ETF, total outflows from ETHE have surpassed $2 billion. This has led to a drop in assets under management from approximately $9 billion to $5.97 billion. On the other hand, the smaller mini-Ethereum Trust (ETH) has seen a growth in assets under management, with net inflows of about $210 million since its inception.
The performance of new spot Ethereum ETFs, excluding Grayscale, has been impressive. ETF Store CEO Nate Geraci pointed out that these ETFs attracted over $1.5 billion in just two weeks, placing them among the top five ETFs launched this year.
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Despite the influx of funds into Ethereum, its price has not been performing well lately. Over the past week, Ethereum’s value has dropped by more than 10%, falling below $3,000. Geraci emphasized that while ETFs provide a gateway for market entry, they do not dictate market performance.
“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,” Geraci asserted.
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