Ethereum Spot ETF Assets Plummet to Record Low

The assets under management (AUM) of exchange-traded funds based on the spot price of Ethereum have shrunk to $5.21 billion, marking the lowest level since the products were registered.

Over the seven weeks since February 23, ETH-ETFs recorded a cumulative outflow of $1.1 billion. This trend persisted as investors withdrew an additional $25.4 million on April 21, despite the rising cryptocurrency market.

The primary source of negative flows was Grayscale’s ETHE. The fund, converted from a trust, cumulatively lost $4.27 billion thereafter.

“Investors were likely deterred by its 2.5% management fee compared to BlackRock’s more competitive 0.25% charge,” suggested experts from The Block.

On April 21, spot Bitcoin ETFs recorded a net inflow of $381.4 million, with the total AUM of these products reaching $97.6 billion.

Experts believe Bitcoin funds are benefiting from the narrative of digital gold and growing institutional interest in the asset. The positioning of ETH as a network token is more complex and contributes to investor hesitation.

Moreover, the U.S. Securities and Exchange Commission has taken a cautious stance on approving staking for Ethereum funds, excluding an attractive yield component.

The ETH/BTC pair ratio reached a local low of approximately 0.018, a level last seen in 2019. The chart below shows the steady weakening of the second-largest cryptocurrency’s price relative to the flagship’s quotes.

Analysts at Bitwise have identified the revival of the Bitcoin hard money narrative as one of four catalysts for the asset’s rally in the second quarter.