Ethereum exchange-traded products faced a challenging end to June, recording the highest outflows since August 2022. According to CoinShares’ weekly analysis, investors withdrew $61 million from Ether investment products between June 24-29, bringing the total outflows for the past two weeks to $119 million. This brought June’s total balance to $37 million in funds withdrawn. The slump has rendered Ether funds the worst-performing asset year-to-date in terms of net flows, with $25 million withdrawn so far.
Performance and Market Trends
Despite the United States Securities and Exchange Commission (SEC) approving Ether exchange-traded funds (ETFs) in May, the cryptocurrency’s price declined by over 8.7% in June. Analysts predict that the eight approved funds will debut in the coming weeks. Bloomberg ETF analysts Eric Balchunas and James Seyffart noted that the SEC recently requested that prospective issuers resubmit their S-1 forms by July 8, pushing the ETFs’ launch to mid-July or later. Bitwise anticipates the funds will attract $25 billion by the end of 2025.
Ether’s outflows of $30 million over the past week contributed to a broader decline in the performance of digital asset investment products. However, unlike previous weeks, most Bitcoin ETF providers experienced modest inflows. Grayscale’s Bitcoin fund saw significant outflows of $153 million, which overshadowed an overall inflow of $10 million among other issuers.
Altcoin Investment Trends
Among altcoins, Solana funds saw inflows of $1.6 million, while Litecoin attracted $1.4 million over the same period. This highlights a continuing interest in altcoins despite the broader market volatility.
This year, a total of $545 million has been withdrawn from blockchain equities, representing 19% of the market capitalization. The significant outflows indicate a cautious investor sentiment towards blockchain-related investments.
Investment Product Flows (June 24-29)
| Asset | Inflows (Million USD) | Outflows (Million USD) | Net Flows (Million USD) |
|---|---|---|---|
| Ether (ETH) | – | 61 | -61 |
| Bitcoin (BTC) | 10 | 153 | -143 |
| Multi-Asset ETPs | 18 | – | 18 |
| Short-Bitcoin | – | 4.2 | -4.2 |
| Solana (SOL) | 1.6 | – | 1.6 |
| Litecoin (LTC) | 1.4 | – | 1.4 |
The recent Ether outflows, combined with broader market trends, suggest a cautious outlook for digital asset investment products. The SEC’s approval of Ether ETFs was initially seen as a positive development, but the subsequent price decline indicates that investor confidence remains fragile.
Analysts have mixed views on the future of Ether and other digital assets:
- Positive Outlook: Some believe that the introduction of Ether ETFs will eventually lead to increased institutional investment and price stability.
- Cautious Sentiment: Others remain cautious, citing regulatory uncertainties and market volatility as ongoing concerns.
The turbulent final week of June for Ethereum exchange-traded products highlights the complexities and challenges faced by the cryptocurrency market. Despite regulatory advancements, such as the approval of Ether ETFs, investor sentiment remains cautious, reflected in the significant outflows and price declines. The broader market trends, including modest inflows for Bitcoin and altcoins like Solana and Litecoin, suggest a mixed outlook for digital asset investment products.
As the market adjusts to these changes, the performance of Ether and other digital assets will continue to be closely monitored by investors and analysts alike. The upcoming launch of Ether ETFs and the response of institutional investors will play a critical role in shaping the future trajectory of the cryptocurrency market.
Featured image credit: Kanchanara via Unsplash