Key Points
- Grayscale’s ETHE experienced $1.51 billion outflows in its first week of trading, causing a drop in Ethereum’s price.
- Coinbase analysts predict the outflows may ease after two weeks.
Grayscale’s ETHE saw a significant outflow of investors, leading to a 7% drop in the price of Ethereum (ETH).
This took place after the commencement of U.S spot ETH ETFs trading, with Grayscale witnessing a total of $1.51 billion weekly outflows. This pushed ETH’s price from $3.5k to $3k.
Grayscale Outflows Expected to Ease
According to Coinbase analysts, the bleeding from ETHE could potentially stop after the next week. When comparing the outflows of GBTC and ETHE, it was noted that ETHE experienced outflows of -$484M and -$327M on its first two trading days. In contrast, GBTC saw outflows of -$95M and -$484M, despite having nearly three times the assets under management (AUM).
Analysts David Duong and David Han suggested that the severe outflows from ETHE could be a short-lived trend, unlike GBTC’s three-month-long outflow streak. They believe that if ETHE follows GBTC’s trend, it could start seeing net inflows once its AUM drops by 53%.
Mixed Opinions from QCP Capital
However, QCP Capital analysts have a less optimistic view on ETH following the spot ETF launch. They believe the absence of a staking feature makes ETF products less appealing to investors. They attributed Grayscale’s outflows to its high 2.5% fee charges. Even the introduction of Grayscale’s Mini ETF version hasn’t managed to mitigate the outflows.
As a result, the ETH ETF has been perceived as a ‘buy the hype, sell the news’ event. Meanwhile, the Stochastic RSI (Relative Strength Index) suggests that ETH could be nearing a price reversal, although a convincing rebound could be delayed. If this is the case, a retest of $3.0k cannot be ruled out before ETH bulls attempt to rebound to clear the overhead resistance levels at $3.5k and $4k.
