IMPORTANT POINTS:
- Despite the bear market, Ether Futures ETFs drive interest in Ethereum.
- Institutional flow into Ethereum is positive, but not comparable to Bitcoin in 2021.
- Solana leads the entry of institutional investors in October.
Despite going through a prolonged cryptocurrency bear market, the recent approvals and launches of multiple Ether Futures ETFs have boosted institutional investor interest in Ethereum (ETH), the second-largest cryptocurrency by market capitalization.
On October 2, six Ether Futures financial products officially began trading. They are detailed below with their respective net expense rates, according to CNBC:
- BitWise Ethereum Strategy ETF (AETH) , 0.85%
- Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP) , 0.85%
- ProShares Ether Strategy ETF (EETH) , 0.95%
- ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE) , 0.95%
- Bitcoin & Ether Market Cap Weight Strategy ETF (BETH) , 0.95%
- VanEck Ethereum Strategy ETF (EFUT) , 0.66%
Expert Perspective on Ethereum
In this context, James Butterfill, Head of Research at CoinShares Co., reported an institutional flow of $13 million in Ethereum products for October 4, being the first net-positive week in a seven-week period.
However, Butterfill highlighted that this current flow cannot be compared to the $200 million of capital inflow from institutional investors for Bitcoin (BTC ) during the launch of the ProShares Bitcoin Futures ETF in 2021. This difference can be attributed to the current cycle. bear market, in contrast to the euphoric bull market of 2021.
Following the launch of various futures based Ethereum ETF launches in the US, we have seen US$13m of inflows so far this week, breaking a 7 week run of outflows.
— James Butterfill (@jbutterfill) October 4, 2023
It is well below the US$200m in the first day for futures based Bitcoin ETFs in the US. But then, we aren't in the… pic.twitter.com/PafFR2h3G8
Institutional investor flows in a prolonged bear market
On the other hand, the prolonged bear market is still evident in the money flow of institutional investors. CoinShares data shows 24 weeks of negative net flows out of a total of 39 weeks (61.5%) since 2022.
As of October 4, Ethereum alone has seen an outflow of $101 million year-to-date (YTD), while Bitcoin has seen an inflow of $219 million in the same period. However, the weekly and month-to-date (MTD) flows are very similar for both assets, with inflows of $16.4 million and $12.9 million for BTC and ETH, respectively.
Additionally, it is interesting to note that Solana (SOL) led the entry of institutional investors in the first week of October, according to data shared by James Butterfill, with $22.7 million of net capital invested in Solana financial products, creating an excellent opportunity for SOL investors.
