Ethereum ETFs flows data pour in after crossing $1 billion trading volume in first day of launch

• Ethereum ETFs have crossed the $1 billion mark in trading volume on the first day of launch.
• Investors won't substitute Ethereum for Bitcoin but would hold both, says Bitwise's Matt Hougan.
• Ethereum could replicate Bitcoin's price post-spot BTC ETF launch following recent price action.

Ethereum (ETH) is down about 1% on Tuesday as spot ETH ETFs crossed the $1 billion mark in trading volume. Given its recent price movement, ETH may replicate the price of Bitcoin post-spot BTC ETF launch.

Daily Digest Market Movers: Ethereum ETFs smash 20% of BTC volume benchmark

Ethereum ETFs have begun trading today after the Securities & Exchange Commission (SEC) greenlighted issuers S-1 registration statements on Monday. The products that went live today and their respective fees include:

• iShares Ethereum Trust (ETHA), Fee: 0.25%
• 21Shares Core Ethereum ETF (CETH), Fee: 0.21%
• VanEck Ethereum ETF (ETHV), Fee: 0.20%
• Fidelity Ethereum Fund (FETH), Fee: 0.25%
• Bitwise Ethereum ETF (ETHW), Fee, 0.20%
• Invesco Galaxy Ethereum ETF (QETH), 0.25%
• Grayscale Ethereum Trust (ETHE), Fee: 2.5%
• Grayscale Ethereum Mini Trust (ETH), Fee after waiver 0.15%

Bloomberg analyst Eric Balchunas speculated that if BlackRock's Ethereum ETF (ETHA) can cross $200 million in trading volume, ETH ETFs could outperform his earlier estimate of the products capturing only 20% of BTC inflows.

ETH ETFs' trading volume broke the $1 billion mark on the first day of trading, surpassing 20% of Bitcoin's first-day volume mark.

DAY ONE in the books for Eth ETFs who did $1b in total volume, which is 23% of what the spot bitcoin ETFs on their first Day and $ETHA did 25% of $IBIT's volume. The gap between $ETHE and The Newborn Eight is a healthy +$625m (a sizable chunk of which *should* convert to inflow

— Eric Balchunas (@EricBalchunas) July 23, 2024

As the ETH products continue raking in impressive volume, Bitwise CIO Matt Hougan believes that investors won't substitute Bitcoin for ETH but would hold both as part of a diversification strategy. “Here's the portfolio I think investors should use as the starting point: Bitcoin ETP: 60% allocation, Ethereum ETP: 30% allocation, Crypto Equities ETP: 10% allocation,” he stated.

Balchunas also compared the volume of ETH ETFs against volume of ETFs launched in the past 12 months. Excluding Bitcoin ETFs, ETH ETFs outperformed several ETFs by a mile.

I was curious how the Eth ETFs would rank in Day One volume vs all 600 or so new launches in the past 12mo but *excluding* the btc ETFs and $ETHA would be #1 (by a lot), $FETH #2, $ETHW #5 and $ETH 7th, and $ETHV in 13th spot. And $CETH, which was lowest among group, would still…

The flows for the products have also started pouring in with Grayscale experiencing outflows as expected. Bitwise, Franklin and 21 Shares seeing good inflows a per Bloomberg data.

Meanwhile, trillion-dollar asset manager Vanguard has reiterated that it won't offer spot ETH ETFs on its platform, similar to its move with Bitcoin ETFs. The asset manager stated that the products do not align with its investment offerings of cash, bonds and equities.

ETH Technical Analysis: Could ETH mimic Bitcoin's price post-ETF launch？

Ethereum is trading around $3,460, down 1% on the day. The ETH ETFs launch is attracting bulls but at a slow pace. ETH 24-hour liquidation is around $32.04 million, with long and short liquidations accounting for 60% and 40%, respectively.

Despite the ETH ETF launch, Ethereum's price has remained horizontal. It appears bears and bulls are battling over which direction prices should face. One major catalyst that may be weighing down bulls is Mt. Gox repaying creditors after transferring BTC to exchanges and outflows from Grayscale's ETHE.

The net inflows of ETH ETFs at the end of their first trading day could serve as a key signal to help decide on ETH's next direction. A high net inflow could serve as a bullish spark, and vice versa for a weak net inflow or potential outflows.

Additionally, Ethereum could see a brief decline in the next few days — similar to that of Bitcoin in the aftermath of the spot BTC ETF launch in January — before a potential rebound above the $3,730 price level. Current price action supports this thesis as ETH longs trail shorts with 47.2% against 52.8% of opened positions.

However, on the options side, ETH options implied volatility (IV) increased from 60% to about 80%, with most traders buying several long-dated call contracts, according to Greekslive data. This could help ETH to see a bullish reversal in the long term.

ETH/USDT 8-hour chart

On the downside, the $3,205 could serve as crucial support to ignite a potential rebound for ETH.