Ethereum Futures ETFs Garner Less Investment Than Expected on Launch Day
Summary:
Despite initial excitement around the launch of nine new Ethereum futures ETFs, only less than $2 million trading volume was recorded on the first day. The most popular fund was Valkyrie's BTF, which already had been trading Bitcoin futures since 2021. This level of investment is viewed as underwhelming compared to the ProShares Bitcoin Strategy ETF that saw over $1 billion trade volume on its first trading day in 2021. Despite the lukewarm response, the debut volume is still considered significant compared to traditional finance ETFs.
The recent flurry of excitement with nine new Ethereum futures exchange-traded funds (ETFs) hitting the market seems to have brought in a smaller investment haul than anticipated. October 2nd marked the introduction of nine new ETF products aiming to follow futures contracts linked to Ethereum's native cryptocurrency, Ether (ETH). In this grouping, only five of the funds are dedicated to Ether futures, the remainder follow both Bitcoin and ETH futures contracts. The volume of investment was described as rather underwhelming by Eric Balchunas, a senior Bloomberg ETF analyst, in a statement on X (formerly Twitter) on October 2. Despite the atypical event of multiple ETFs launching simultaneously, no single one stood out as successful, all performed averagely.
By midday EST on the debut trading day, all nine ETFs had seen less than $2 million in trade volume. Valkyrie's BTF, tracking both Bitcoin and Ether, managed to attract the highest volume among the futures ETF products with $882,000. Importantly, BTF had already been operating as a Bitcoin-only futures ETF since October 2021, and recently adjusted to encompass ETH also. In contrast, the first day trading volume for these Ether ETFs fell short compared to that of ProShares Bitcoin Strategy ETF (BITO), which in its October 2021 debut, amidst heightened crypto market activity, experienced over $1 billion in trade volume.
However, Balchunas pointed out that the volume actually constituted "quite a lot" when compared to a traditional finance ETF launch, even though investors tend to favor spot ETF products over futures. He also stated that all the products were set to launch on the same day as this was a requirement of the SEC to prevent one fund from monopolizing the market.
At the same time, as various US companies scrambled to attain a leading position in the emerging Ether futures market, ETF firm Volatility Shares retracted its plans to list a similar product, citing a lack of opportunity in the current climate.
Published At
10/3/2023 12:55:44 AM
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