In a market brimming with anticipation, the inaugural day of Ethereum futures ETFs trading on CME began on a quieter note. With a debut trading volume of less than $2 million in the initial 15 minutes, Ethereum-based ETFs trail far behind the staggering volumes seen by their Bitcoin counterparts.
Understanding the Numbers
The disparity between the Ethereum and Bitcoin futures ETFs trading volumes is quite notable. Bitcoin-based ETFs, on their first day, saw trading volumes that were nearly 100 times greater than that of Ethereum’s debut. Bloomberg analyst, Eric Balchunas, pointed out that while such figures are typically expected from newly launched ETFs, they are considerably low for Ethereum, considering its substantial market presence.
Delving into specifics, Valkyrie’s ETF emerged as the day’s top performer. It generated a trading volume of $787,000 and was developed based on a mix of the market’s two largest cryptocurrencies in terms of capitalization. In contrast, VanEck’s Ethereum futures-only ETF recorded a trading volume slightly exceeding $300,000.
By day’s end, six Ethereum futures-based ETFs combined managed a turnover of $1.92 million. Of this amount, ProShares Ether Strategy ETF contributed $879,000.
Historical Comparisons & Market Conditions
It’s essential to highlight that the current crypto market dynamics are quite different from two years ago when Bitcoin ETFs made their first appearance. The present bear market landscape has intensified competition, as indicated by Bloomberg.
Future Predictions and Regulatory Considerations
Roxanne Islam, the deputy research director at VettaFi, posits that the lukewarm response to Ethereum-based futures ETFs might be because investors are awaiting the introduction of spot versions, primarily for Bitcoin. Predictions are rife about the possibility of a Bitcoin spot version surfacing in early 2024.
Yet, the US Securities and Exchange Commission (SEC) continues to push back on its considerations for the same. In a recent move, the SEC extended its evaluation period for several Bitcoin spot ETF applications. The decision on the ARK 21Shares’ Bitcoin ETF application, too, has been deferred to the coming year.