Anika Begay
Ethereum’s price action has been a major source of concern for investors in recent weeks, persisting in a downward trend. What makes the token’s struggles even more worrying is that it has shown no signs of relief despite the recent launch of spot ETH ETFs (exchange-traded funds) in the United States.
However, it appears that the disappointing performance of ETH ETFs — so far — may even be contributing to Ethereum’s price woes in recent weeks. In particular, Grayscale has seen a significant outflow of capital from its Ether fund, the Grayscale Ethereum Trust (ETHE).
Grayscale Ethereum Trust Hits $2.1 Billion in Outflows
After its first full week of trading, the U.S. spot Ethereum ETF market has seen a significant outflow of funds from crypto products. According to data from SoSoValue, a total of $169.35 million flowed from ETH exchange-traded funds last week.
While this still represents a significant amount of outflow from Ethereum spot funds, it is more than 50% lower than the outflow seen in the debut week. In the debut week, the ETH ETF market saw a net outflow of over $341 million.
The primary fund responsible for this level of capital outflow is Grayscale Ethereum Trust, which has seen a withdrawal of over $2.1 billion in the last two weeks. ETHE saw a net outflow of over $1.5 billion in its launch week.
Grayscale Ethereum Trust (ETHE) | Source: SoSoValue
Grayscale Ethereum Trust saw a total outflow of $61.43 million on Friday, August 2, according to data from SoSoValue. This latest move by the fund brings ETHE’s total net asset value to just under $6 billion.
Similar to when the spot Bitcoin ETFs launched, Grayscale’s ETHE holders appear to be redeeming their shares from the fund, having been unable to do so for years. And as seen with BTC, the massive outflows appear to be putting a fair amount of downward pressure on Ethereum’s price.
Ethereum Price Overview
At the time of writing, Ethereum is trading around $2,907, reflecting a 2.2% decline in value over the past 24 hours. According to CoinGecko data, the cryptocurrency has dropped by more than 10% over the past seven days.
This seven-day performance underscores the ETH token’s struggles in recent weeks. CoinGecko data shows Ethereum’s price has dropped nearly 8% in the past month.
Nonetheless, Ether maintains its position as the second largest cryptocurrency in the sector, with a market capitalization of over $347 billion.
The Ethereum price on the daily timeframe | Source: ETHUSDT chart on TradingView
Featured image from iStock, chart from TradingView
