Ethereum Market Sees Massive Shifts With The Launch Of Spot ETFs
By: Eva Baxter
Ethereum's spot ETFs recorded a robust trading debut in the US on July 24 after months of speculation and regulatory uncertainty. The ETFs registered an impressive volume of $1.11 billion on the first trading day, led by BlackRock's $266.5 million inflows. Within the first 90 minutes of trading, ETH ETFs recorded $361 million in trading volume, showcasing strong interest and confidence in Ethereum.
Despite this positive start, Ethereum ETFs saw mixed performance across various providers on their second trading day. Data from Farside Investors indicates that while firms like BlackRock and Bitwise saw positive net inflows, Grayscale's ETHE experienced a significant drop of $326.9 million. Overall, Ethereum ETFs had a negative net inflow of $25.7 million over the two days.
The excitement around spot ETFs has significantly influenced Ethereum's derivatives market. The entire derivatives sector saw steady growth in open interest, particularly evident on July 24, reaching $7.39 billion, according to CoinGlass. Futures markets followed the same trend with an increase of $460 million in open interest, though the impact was less pronounced due to the market's size.
Additionally, on-chain data from Santiment has shown a noticeable uptick in whale transactions on the Ethereum network, with 77,200 large transactions recorded recently. This activity is correlated with heightened interest from institutional investors who may be using sophisticated trading strategies such as basis trade. Though this strategy can improve market liquidity and structure, it also poses risks like market manipulation and abrupt corrections, especially given Ethereum's substantial DeFi market.
Moreover, CME's Ether futures also recorded the highest-ever open interest of 383K ETH following the ETF debut, further illustrating the market's renewed vigor. This resurgence could see more institutional participation, leading to increased liquidity and potentially improved price discovery and risk management capabilities for Ethereum.
