New Ethereum futures ETFs face muted market response.
The debut of nine Ethereum futures exchange-traded funds (ETFs) on October 2nd was met with modest enthusiasm, as total trading volume barely reached $2 million by midday. This response was surprisingly muted, especially compared to prior ETF launches in cryptocurrency.
The new ETFs were introduced to track futures contracts tied to Ethereum's native cryptocurrency, Ether. Out of nine, five are exclusively designed for Ether futures, while the remaining four include both Bitcoin and Ether futures contracts in their portfolios.
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Eric Balchunas, a senior ETF analyst at Bloomberg, used X to comment on the unenthusiastic turnout, stating it was a "pretty meh day of volume."
Of the nine, Valkyrie's Bitcoin Strategy ETF, which tracks both Bitcoin and Ether futures, claimed the highest trading volume at $882,000. Interestingly, this ETF was initially a Bitcoin-only futures ETF and recently incorporated Ether into its investment strategy.
The peaceful first day of ETF trading stands in stark contrast to ProShares Bitcoin Strategy ETF (BITO), launched in October 2021. It was met with overwhelming market interest, garnering over $1 billion in trading volume on its first day.
Balchunas pointed out that the day's trading volume for the Ethereum ETFs was actually "quite a lot" compared to typical launches of traditional finance ETFs. Still, he noted that investors generally prefer spot ETFs over futures ETFs.
All the newly introduced ETF products were set to launch simultaneously, as the Securities and Exchange Commission (SEC) dictated. With this move, the regulator intended to prevent one ETF from monopolizing the market.
The muted debut of the nine Ethereum futures ETFs serves as a cautionary tale about the market appetite for such financial products. While the numbers could improve as investors become more familiar with these new offerings, the initial tepid response may indicate a cautious or selective approach by the market, especially when compared to previous crypto ETF launches. Whether this subdued start is a prototype for future performance remains to be seen.
