Ethereum prices hit record lows on account of massive ETH selling by investors ever since the SEC approved Ethereum ETFs.
The US Securities and Exchange Commission (SEC) eventually approved the spot Ethereum ETF (exchange-traded fund). Due to this a significant rise in Ethereum price occurred. Ethereum ETFs however, had a disappointing debut and did not perform as expected in their first week of trading. Investors started selling their ETH on the hype of SEC approval of Ethereum ETFs.
Grayscale Responsible for Heavy Spot Ethereum ETF Redemptions
On Friday, July 26, these ETFs saw large outflows for the third consecutive day bringing total net outflows to nearly $341 million in the first week.
Despite a strong start with inflows of $106.8 million on the first day. The ETF faced large amounts of outflows in the following days $133 million on Wednesday, $152 million on Thursday, and $162 million on Friday.
Grayscale’s ETH trust alone saw an outflow of $356 million on Friday. Since the launch of the Spot Ethereum ETF. Grayscale’s products have seen net inflows totaling $1.51 billion. Meanwhile, the price of Ethereum has fallen by more than 7% over the past week. Currently sitting at around $3,248.
New Money Inflow Less Impactful On ETH
A research company called CryptoQuant found that every dollar invested in Bitcoin can make its value go up by $5. For Ethereum, the same dollar only makes this value increase by $1.30. even with new investments like ETFs Ethereum’s value would not grow as fast as Bitcoin’s this year.
Conclusion
The Spot Ethereum ETF has not good start with more investors pulling out money and the price of Ethereum also falling. Although there was a lot of excitement in the beginning, ETFs have not been performing well, especially due to big companies like Grayscale.
Also, the impact of new investments in Ethereum is less than that of Bitcoin, due to which Ethereum is facing challenges. Now it remains to be seen whether these ETFs make a comeback or not and whether the price of Ethereum will increase or not.
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