Key Points
- Second week of trading saw a significant decrease in U.S spot Ethereum ETFs outflows compared to the debut week.
- Even with tapering Grayscale outflows, Ethereum’s price remained subdued due to cautious investor sentiment.
The world’s largest altcoin, Ethereum (ETH), has seen a drop below $3,000 due to negative market sentiment.
Significant Decline in Ethereum Outflows
The second week of trading witnessed a significant decrease in outflows from U.S spot Ethereum ETFs. In the debut week, the products recorded net outflows of $341.3 million, mainly driven by Grayscale’s ETHE and Mini Trust (ETH) products.
ETHE accounted for $1.5 billion in outflows in the first week of trading. However, these outflows appeared to be ‘tapering’ in the second week, according to Coinbase analysts.
Impact on Ethereum’s Price
In the first week, total Grayscale outflows were $1.94 billion – $1.5 billion from ETHE and a $448 million dump on Mini Trust (ETH). By the second week, ETHE saw $603 million in outflows, while ETH shed $175.5 million. This meant that outflows fell below $800 million in the second week, indicating a slowdown in the investor exodus from Grayscale.
Coinbase analysts had previously predicted that Grayscale ETF outflows would ease by the second week, comparing their patterns to those of GBTC. Despite this, Ethereum’s price has remained subdued amidst cautious investor sentiment across the U.S and Asian markets.
Excluding ETHE, the spot ETH ETF has seen over $1.5 billion, according to Farside Investors data. However, due to the market’s overwhelmingly negative sentiment, Ethereum’s price fell below $3k.
At the time of writing, Ethereum seemed to be re-testing the $3,000 mark on the charts, a level which doubled as a crucial demand zone in 2024 for the fifth time. This effectively reversed all its July gains. It remains uncertain whether the tapering of Grayscale outflows will initiate a rebound at the demand level.
