- Ethereum ETFs saw significant outflows, overshadowing total flows.
- Crypto analyst ZERO IKA warned that ETFs may not be inherently bullish for assets.
As a seasoned crypto investor with a decade-long journey navigating the ever-evolving digital asset landscape, I must confess that I have grown increasingly skeptical about the impact of ETFs on Ethereum’s price action. The recent outflows from Ethereum ETFs, particularly Grayscale’s ETHE, have left me scratching my head more than once.
As an analyst, I’ve observed that despite the introduction of Ethereum [ETH] Exchange-Traded Funds (ETFs), the predicted rise in Ethereum’s value to around $4,000 hasn’t occurred as expected.
As a crypto investor, I’ve noticed that Ethereum (ETH) has experienced a dip in value, currently trading at approximately $2,584 as we speak. Over the past 24 hours, it has dropped by 2.94%, according to CoinMarketCap.
ETH ETF market trend
Additionally, it’s worth mentioning that Ethereum ETFs have seen a significant withdrawal of approximately $6.5 million as of August 20th. This trend of withdrawals has been ongoing since the 15th of August, according to Farside Investors.
Upon careful analysis, it was observed that Grayscale’s ETHE has consistently experienced a substantial outflow compared to the combined inflows and outflows of all ETH-based Exchange Traded Funds (ETFs).
On the 20th of August, ETHE specifically was responsible for a total of $37 million in withdrawals, which added up to a general net withdrawal of $6.5 million for all Ethereum-based ETFs.
From its beginning, ETHE has experienced an impressive total withdrawal of approximately $247.8 million. In comparison, the overall withdrawal amount across all Ethereum Exchange-Traded Funds (ETFs) amounts to a significant $440.5 million.
Execs defy ETF notion
However, despite the widespread belief that the launch of ETFs is inherently bullish for Ethereum and other assets, crypto analyst ZERO IKA argue,
“The thing that ETFs are just “bullish engines” is as far from reality as possible.”
He further added,
“Recently proposed strategies appear to have been overlooked, and it seems there’s a consensus among many that Exchange Traded Funds (ETF) point towards a positive market trend, creating something like an ‘echo chamber’ of bullishness.”
Here, ZERO IKA challenged the common notion that ETFs automatically drive up asset prices.
Rather than stating otherwise, it’s important to note that institutions and hedge funds frequently employ ETFs as income-producing devices, leveraging techniques like purchasing (holding long positions) and selling (short positions) of assets.
From this viewpoint, it’s proposed that Exchange-Traded Funds (ETFs) aren’t just tools for bullish strategies, but they could potentially be utilized to influence market conditions to the advantage of institutions, which raises questions about their perceived beneficial effect on asset prices.
BTC ETF market trend
It’s worth noting that, similar to Ethereum ETFs, Grayscale’s Bitcoin ETF (GBTC) has occasionally seen substantial withdrawals, as reported by Farside Investors.
Occasionally, the withdrawals from Grayscale Bitcoin Trust (GBTC) surpass the total withdrawals from the overall Bitcoin Exchange-Traded Funds (ETFs), suggesting comparable tendencies in institutional activity and possible instances of market manipulation.
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2024-08-21 16:08