Early Ethereum ETF Volumes Low, But Confidence for Spot ETF Launch High

A total of nine Ethereum futures ETFs were launched on October 2 but initial trading volumes across them have been low, according to industry experts.

On October 2, Bloomberg ETF analyst Eric Balchunas said there was “pretty meh volume for the Ether Futures ETFs as a group,” adding that less than $2 million in volume had been trading by midday.

It was “about normal for a new ETF,” he added.

Pretty meh volume for the Ether Futures ETFs as a group, a little under $2m, about normal for a new ETF but vs $BITO (which did $200m in first 15min) it is low. Tight race bt VanEck and ProShares in the single eth lane. pic.twitter.com/F9AHtrVcVf

— Eric Balchunas (@EricBalchunas) October 2, 2023

Ethereum Futures ETFs Not Bullish

He compared it to the first Bitcoin futures ETF, BITO, which did $200 million in the first 15 minutes. However, the ProShares Bitcoin Strategy ETF was launched at the height of a bull market in October 2021.

MV Capital CIO Tom Dunleavy said he was “always very confused why anyone thought this was bullish” before adding:

“The only thing that matters is spot buying which a SPOT ETF facilitates because these funds need to be seeded (i.e. they have to purchase a set amount ahead of time regardless of market demand).”

If ten or twelve spot ETFs are approved for BTC or ETH, “that is $500 million to $1 billion in spot buying, he said. “This is extremely meaningful in terms of price action,” he added before concluding that “Futures ETFs do not facilitate this latent demand.”

ETF Store President Nate Geraci said that issuers were clearly feeling more confident in SEC approval of spot Bitcoin ETFs. He quoted a couple of comments from CNBC:

Bitwise CIO Matt Hougan said, “I expect we’ll see a spot bitcoin ETF this calendar year,” while VanEck CEO Jan van Eck commented, “It looks like early in 2024 we will probably see a spot product.”

Ethereum Price Reaction

ETH prices were not boosted by the launch of the first futures ETFs for the asset in America. Futures contracts do not invest directly in the asset, they use other futures contracts from the Chicago Mercantile Exchange, so they bear no weight on spot ETH prices.

Ethereum has gone in the opposite direction, having lost 3.4% on the day, resulting in a fall to $1,667 at the time of writing.

It is already dumping from its Monday pump to $1,735, and looks like it will return to support at $1,650.