The spot Ethereum ETF, which has been available for trading in U.S. markets for about a month, recorded its ninth consecutive day of net outflows on Tuesday.
Net inflows into the category remain in the red at $482 million since the start of late July, according to data from Far Side Investors.
read more: US Spot ETH ETF Completes First Month
The Bitcoin ETF recorded eight consecutive days of generally positive inflows during that period, a streak that ended on Tuesday.
BTC funds saw net inflows of $252 million on August 23 (the largest single-day inflow since July 22), the same day Federal Reserve Chairman Jerome Powell signaled a rate-cutting cycle. In contrast, Ethereum ETFs saw roughly $13 million outflows on the same day.
CoinShares head of research James Butterfill wrote in a report on Monday that the inflows indicate “Bitcoin's sensitivity to interest rate expectations.”
So monetary policy could be a catalyst for Bitcoin. But what will drive Ethereum ETF inflows?
“The first step is education,” John Hoffman, managing director at Grayscale Investments, told Blockworks.
“There's less awareness of Ethereum compared to Bitcoin,” he added. “We're trying to increase those conversations and help investors understand the differences between the two and why an allocation to both Bitcoin and Ethereum can be beneficial for portfolio construction.”
read more: A closer look at Grayscale's spinoff ETF launch and the cryptocurrency outlook
Analysts and executives agree that the asset management sector will be a major driver of cryptocurrency adoption in the coming months and years.
Bitwise head of research Ryan Rasmussen previously noted that advisors are “very slowly” coming to grips with cryptocurrencies, adding that finance professionals he met recently were “shocked and fascinated to learn that Ethereum is a technology platform that generates cash flow and pays dividend-like yields to stakers.”
read more: An “excited” atmosphere regarding cryptocurrency's institutional advancements
Historically, there has been a perception of “reputational risk” for those allocating funds to the crypto asset class, Hoffman said.
“What we're seeing right now with spot bitcoin and spot ethereum ETFs is that in many ways the risks have reversed,” he said. “Investors are now realizing that if they don't put in the effort in this asset class, there could be risks to their careers and their reputations.”
“And that's because their customers are asking them questions about this space more explicitly than they've ever seen before,” Hoffman added.
Excluding high-priced Grayscale Ethereum Trust (ETHE), which saw outflows of $2.5 billion, the eight new spot ETH offerings welcomed roughly $2.1 billion in new assets in their first 26 trading days.
BlackRock’s iShares Ethereum Trust (ETHA) saw inflows of $1 billion, while the Fidelity Ethereum Fund (FETH) came in second with inflows of $392 million.
Bitwise Ethereum ETF (ETHW) and Grayscale Ethereum Mini Trust (ETH) came in third and fourth with $314 million and $236 million, respectively.
“We're 30 days into it, we're in the middle of summer, and by any standards, these have been very successful launches,” Hoffman said. “The trajectory going forward is education, understanding, portfolio implementation and flow.”
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