Against the backdrop of a sharp decline in Ethereum (ETH) prices, U.S.-listed Ethereum ETFs recorded nearly $49 million in inflows on Monday, demonstrating strong demand from investors for this cryptocurrency. Despite a 20% drop in ETH prices within a day, professional investors chose to buy at lower levels, indicating a continued positive outlook on Ethereum's fundamentals.
Key Points
- Ethereum ETFs recorded $49 million in inflows on Monday, despite the sharp drop in ETH prices.
- The majority of inflows came from BlackRock's ETHA, with an inflow of $47 million.
- Grayscale's ETHE saw an outflow of $46 million.
- The applications on the Ethereum network showed resilience during the price drop, indicating strong fundamentals.
On Monday, Ethereum's price dropped by as much as 20%, marking the largest single-day decline since 2021. The main reason for this drop was the well-known crypto trading firm Jump Crypto transferring a large amount of Ethereum to centralized exchanges in preparation for potential sales. Additionally, the overall adjustment in the crypto market intensified selling pressure, with over $340 million in ETH futures being liquidated.
Nevertheless, professional investors bought at lower levels, with data showing that the trading volume of Ethereum ETFs exceeded $715 million, the highest level since July 30. BlackRock's ETHA led the way with an inflow of $47 million, while Fidelity's FETH and VanEck's ETHV each recorded inflows of $16 million.
Performance of Ethereum ETFs
| ETF Name | Inflow Amount (Million USD) | Outflow Amount (Million USD) |
|---|---|---|
| BlackRock ETHA | 47 | 0 |
| Fidelity FETH | 16 | 0 |
| VanEck ETHV | 16 | 0 |
| Grayscale ETHE | 0 | 46.8 |
| Grayscale Mini Trust | 7 | 0 |
Although Ethereum ETFs have seen inflows in the short term, their total net outflows since launch have reached $460 million, indicating that long-term demand has not yet fully materialized. In contrast, Bitcoin ETFs recorded over $1 billion in net inflows within the first 12 days of trading.
Market Observations
Some market observers noted that despite the significant drop in Ethereum prices, applications on the Ethereum network continue to show resilience, indicating strong fundamentals. Alice Liu, Chief Researcher at CoinMarketCap, stated, "The significant drop in Ethereum's price is mainly due to the sell-off by Jump Crypto and the liquidation of other large wallets."
She added, "It is worth noting that LSDFi performed well under stress testing, Lido's withdrawal queue did not significantly increase, and there was no liquid staking relying on different projects."
Additionally, Liu mentioned that the recent liquidations seem to have revitalized the decentralized finance (DeFi) market, with significant increases in activity on the network and transaction fees returning to manageable levels of 10-15 Gwei.