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Spot Ethereum ETFs made a stunning debut on July 23, with an influx of $107 million on the first day, marking a huge milestone for the crypto market. Bitwise CIO Matt Hougan expressed optimism for more crypto ETFs, including Solana, following this success.
Ethereum ETF Success: A Record-Breaking Launch
The launch of Spot Ethereum ETFs marked a historic moment in the crypto industry. Bitwise Asset Management’s Chief Investment Officer, Matt Hougan, expressed his enthusiasm over the reception of the newly launched Ether ETFs. The Ether ETFs, including Bitwise’s own ETH ETF (ETHW), not only met but exceeded expectations. ETHW alone saw over $200 million in inflows on the first day.
“To be honest, it’s exceeded my expectations through lunchtime,” Hougan shared in a Bloomberg interview. He added that the new ETFs traded about half a billion dollars, comparing this with the average ETF which trades about a million dollars on its launch day. This substantial trading volume places Ethereum ETFs among the most successful ETF launches in history, second only to Bitcoin ETFs.
The success of Ethereum ETF has significant implications for the broader crypto market. Hougan suggested that the approval of these ETFs signals a new era for crypto investment.
“Long term, as we look into 2025, we’ve entered the ETF era of crypto,” he stated. “We’re going to see ETFs on multiple crypto assets; we’re going to see index-based ETFs.”
Furthermore, Hougan highlighted that Solana ETF filings by VanEck and 21Shares were already in progress. This increases the chances of other altcoins also finding their place in the ETF market. Other experts have also expressed bullish narratives as Spot Ethereum ETFs bagged robust inflows on the first day.
Ethereum ETF Success: Inflows and Market Impact
The first day of Ethereum ETF success saw BlackRock’s ETH ETF (ETHA) leading with $265 million in total inflows, establishing itself as the market leader among its peers. Fidelity’s Ether ETF (FETH) recorded over $70 million in inflows, while other players like Invesco, 21Shares, VanEck, and Franklin saw inflows between $5-$15 million.
However, Grayscale’s ETHE fund faced significant outflows, totaling $484 million. These negative flows accounted for a staggering 5% of its $10 billion in assets under management. This outflow occurred just a day after Grayscale transferred $1 billion to its Ethereum Mini-Trust to provide seed capital for the launch event.
Bloomberg analyst Eric Balchunas highlighted the extraordinary nature of these launches. He noted on social media platform X that ETHA ranked first in day-one volume among all new launches in the past year, excluding Bitcoin ETFs. ETHW ranked fifth, FETH second, and other Ether ETFs also performed strongly.
Matthew Sigel, VanEck’s Head of Digital Assets Research, emphasized the positive outcome for Ethereum ETFs. “23% of Day 1 Spot Bitcoin ETF Volumes is a Great Result for #ETH ETFs, which collectively traded $1.1 billion,” Sigel stated.
Looking forward, Hougan predicted that institutional investors will play a more significant role in the inflows for BTC and ETH ETFs. Currently, institutional investors account for 5-6% of Bitcoin ETF inflows, according to recent 13F filings. He expects the percentage of institutional influx to rise to 50%.
Ethereum ETF Success: Future Prospects
The approval of Ethereum ETF by the U.S. Securities and Exchange Commission (SEC) has sparked discussions about potential ETFs for other altcoins. Spencer Bogart, General Partner at Blockchain Capital, estimated that Ethereum ETFs could see over $10 billion in inflows within the first 12 months. Similarly, Ryan Rasmussen, Head of Research at Bitwise, projected ETH price could reach a new all-time high between $6,500 and $7,500.
Standard Chartered Bank analyst Geoffrey Kendrick previously predicted that the SEC might greenlight ETFs for Solana (SOL) and Ripple-backed XRP by 2025. Kendrick noted that while the market anticipates these developments, they are unlikely to occur in 2024 due to the complex approval process.
He also suggested that the SEC’s decision not to classify ETH as a security could have broader implications. Other cryptocurrencies with similar technology to Ether might also avoid being labeled as securities, potentially paving the way for their own ETF launches.
The Ethereum ETF success has set a new standard in the crypto market. With substantial inflows and significant trading volumes, these ETFs have demonstrated the potential for further crypto ETF developments. As investors and experts watch closely, the future of crypto ETFs, including Solana and XRP, looks promising. TurkishNY Radio will continue to provide updates on these groundbreaking developments.
