The launch of nine new Ethereum futures exchange-traded funds (ETFs) has not attracted significant investment dollars.
These ETF products, introduced on October 2, are designed to track futures contracts tied to the value of Ethereum’s native currency Ether (ETH). Out of the nine funds, five exclusively hold Ether futures, while the remaining four track a combination of Bitcoin and ETH futures contracts.
Bloomberg’s senior ETF analyst Eric Balchunas expressed his disappointment with the trading volume on the launch day, stating, “Pretty meh day of volume.” He also highlighted that all the funds hold futures contracts, whereas ETF investors typically prefer physical assets over derivatives.
By midday EST on the first day of trading, the cumulative trading volume for all nine ETFs was less than $2 million. The most popular among them was Valkyrie’s BTF, which tracks both Bitcoin and Ether, accumulating a trading volume of $882,000.
Notably, BTF had been trading as a Bitcoin-only futures ETF since October 2021 but adjusted its strategy to include ETH.
The trading volume of the Ether ETFs on their first day was significantly lower than that of ProShares Bitcoin Strategy ETF (BITO), which witnessed over $1 billion in trading volume on its debut day in October 2021 during a bullish market for cryptocurrencies.
Eric Balchunas remarked that despite the lower volume compared to traditional finance ETF launches, the volume was still considerable. However, he acknowledged that investors generally prefer spot ETF products instead of futures.
The simultaneous launch of all the products on the same day was enforced by the SEC to prevent any one fund from dominating the market.
In the midst of US firms competing in the emerging Ether futures market, Volatility Shares, an ETF firm, decided to cancel its plans to list a similar product, citing a lack of opportunity at the current time.