Institutional investors are taking advantage of the recent dip in Ethereum prices, as spot Ethereum exchange-traded funds (ETFs) show positive inflows. This trend is not mirrored by Bitcoin funds.
Positive Inflows for Ethereum ETFs
On August 5, U.S. spot Ethereum ETFs experienced significant inflows totaling $49 million, marking the second-highest inflow day since their inception. This followed a major market crash that saw Ethereum’s value plummet by 23% in less than 24 hours, indicating that institutional investors are buying the dip in Ethereum prices.
In the past ten days, there have only been four days of positive inflows, suggesting a strategic purchase during price drops. ETF specialist James Seyffart confirmed this trend, stating, “ETF investors, in aggregate, likely bought the dip on Ethereum today.”
Leading the Inflows
BlackRock’s ETHA fund topped the inflows with $47.1 million, bringing its total to $760 million. VanEck’s ETHV fund followed with $16.6 million, and Fidelity’s FETH attracted $16.1 million. Other significant inflows included Bitwise’s ETHW fund with $7.2 million and Grayscale’s Ethereum Mini Trust (ETH) with $7.6 million. In contrast, the main Grayscale ETHE fund saw an outflow of $46.8 million, its lowest since it converted to a spot ETF.
Bitcoin Funds Experience Outflows
Unlike Ethereum, Bitcoin funds did not see the same buying interest. Preliminary data from Farside Investors indicated an outflow of $168.4 million from Bitcoin funds on Monday. Fidelity, Ark 21Shares, and Grayscale all reported outflows ranging from $58 to $70 million, while BlackRock and several others reported zero flows. Grayscale’s Mini Bitcoin Trust saw a minor inflow of $21.8 million, and Bitwise (BITB) and VanEck (HODL) each received about $3 million.
Market Reactions and Future Outlook
Bitwise CIO Matt Hougan noted the net inflows into both Bitcoin and Ethereum ETFs, highlighting the investor interest in buying the dip, especially for Ethereum.
Ethereum prices hit a 2024 low of $2,171 on August 5, marking the steepest decline since May 2022, with a 34% drop in less than a week. However, there are signs of recovery, with Ethereum reclaiming $2,500 during the Tuesday morning Asian trading session. For a continued uptrend, Ethereum needs to break the $2,900 resistance level, a process that may take time, especially if Bitcoin’s recovery is slow.
