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U.S. spot Ethereum exchange-traded funds have only been trading for a day, but fresh data from Bloomberg shows they’re off to a “solid” start.
Despite substantial outflows from Grayscale’s Ethereum Trust (ETHE) topping $484 million, the combined total inflows from eight other competitors have dragged the performance into positive territory.
Funds belonging to BlackRock (ETHA) and Bitwise Asset Management (ETHW) topped the list, clocking $266 million and $204 million, respectively, pushing the total inflows, excluding Grayscale, to $590 million.
“The Ethereum ETFs took in $107 million,” Bloomberg analyst James Seyffart tweeted on Tuesday alongside accompanying ETF data. “Very solid first day.”
The volume for the full day’s worth of trading for the funds also topped $1.1 billion, doubling its $600 million figure achieved halfway through Tuesday, data shows.
In May, the U.S. Securities and Exchange Commission gave preliminary approval to ETF issuers, providing a pathway to begin listing the funds on exchanges—much to the surprise of crypto industry participants at the time.
With the initial excitement stemming from that approval now out of the way, some analysts forecast significant holdings flowing into the funds over the next year, bolstering their total assets under management.
"We may see $5 billion to $10 billion aggregate AUM over the next 12 months," Katalin Tischhauser, head of investment research at digital asset banking group Sygnum Bank, told Decrypt.
"However, it’s likely that the demand from new types of investors will occur more in the first half of 2025 than during this year," Tischhauser said. "Hedge funds will probably move the fastest."
The range and scope of ETH ETF takings is likely to be impacted by the direction and pace of change in the U.S. political and regulatory environment against the crypto industry, she said.
Political winds have shifted considerably in recent months, with Vice President Kamala Harris now tipped to lead the Democratic Party in their fight against Former President Donald Trump for a White House bid.
President Joe Biden’s decision to bow out of the presidential race this week has renewed optimism among crypto types for a more favorable approach to regulation under a Trump administration.
Despite the changing political landscape, Ethereum ETFs will need to see a build-up in inflows to prove it has an attractive market fit for large investors, Ryan McMillin, chief investment officer at crypto fund manager Merkle Tree Capital, told Decrypt.
“The lead-up for Ethereum was different to Bitcoin as Bitcoin rallied hard into the launch of its ETFs then sold off as entities rotated out of Grayscale,” he said.
“Ethereum didn't really rally into the launch. It caught a bit of a bid, McMillin added. "Now we need to see sustained demand. That is the real test.”