Saturday, February 24, 2024

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    Ethereum Futures ETF Hurt by Low Trading Volume at Launch, Possible Reasons

    The long-awaited Ethereum Futures Exchange Traded Fund (ETF) fell short of many traders’ expectations as multiple variants of the product went live on Monday. According to insights shared by Eric Balchunas, senior ETF analyst for Bloomberg, cumulative trading volume for ETFs on the first day of trading was just under $2 million.

    Pretty high volume for Ether Futures ETFs as a group, just under $2 million, about normal for a new ETF, but compared to $BITO (which made $200 million in the first 15 minutes) it’s low. Close race with VanEck and ProShares in one track.

    After the Securities and Exchange Commission (SEC) gave the green light to many ETF proposals from the likes of VanEck, ProShares, Valkyrie and Bitwise, among others, US exchanges welcomed multiple launches earlier this week.

    According to the data shared, Valkyrie’s combination of Bitcoin and Ethereum Futures ETFs had the highest trading volume, which was fixed at around $787,376 at 11:15 on Monday. The same low trading volume characterized the offerings of ProShares, whose Ethereum Futures ETF traded a total of just a measly $284,112.

    While it is a fact that such a product is available to mainstream investors to gain exposure to the crypto space, Balchunas pointed out the volume is weak compared to the more than $200 million that the first Bitcoin Futures ETF saw in the first 15 minutes after it went live.

    Possible reason for damaged volume

    The industry has been quite adamant about SEC approval of a crypto ETF product. While the market regulator has always been interested in the futures variant, what the industry wants most are spot ETF versions of Bitcoin and Ethereum.

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