Ethereum Spot ETF Trading Volume Surpasses $500 Million

The total trading volume of spot ETFs based on the second-largest cryptocurrency by market capitalization exceeded $500 million just hours after the debut of the new instrument on regulated American exchanges.

The primary contributor to this metric was Grayscale’s ETHE (~$222 million). Other leaders included BlackRock’s ETHA (~$117 million) and Fidelity’s FETH ($70.6 million).

In a conversation with The Block, Hashkey Capital Liquid Fund partner Jupiter Zheng suggested short-term market pressure due to Grayscale’s high fees.

“A correction is likely some time after the launch of spot ETH-ETFs. That is, outflows from the Grayscale Ether Trust could soon dampen sentiment, as seen with bitcoin ETFs. Investors might redirect their funds to options with lower fees,” the expert shared.

The screenshot above indicates that the management fee for Grayscale’s ETHE fund is 2.5%, significantly higher than competitors’ rates (0.15-0.25%).

According to Zheng, another barrier to demand for new instruments is the exclusion of staking rewards.

“While ETFs provide institutions with a regulated and convenient way to access Ethereum, retail investors and those looking to maximize returns might prefer holding ETH directly to receive staking rewards,” he added.

However, Zheng remains optimistic about the long-term prospects of Ethereum ETFs.

“In our view, by the end of this year, Ethereum could reach a price range of $6,000-10,000,” the expert concluded.

Trading of spot ETH-ETFs began on July 23. Following the debut of these new financial instruments, there was a slight correction in the price of the second-largest cryptocurrency by market capitalization.

Analysts at QCP Capital considered the market’s reaction to the launch of Ethereum-based exchange-traded funds as “muted.”