The first-ever exchange-traded funds based on Ether futures began trading in the US, capping a years-long battle by firms to provide investment vehicles centered on the second-largest digital token.
“Even if there’s not a lot of grassroots demand the same way as there was for BITO — which we don’t know yet — all of these firms will put a lot of marketing behind these funds,” said James Seyffart, an analyst at Bloomberg Intelligence. He cites Ether futures open interest, which is about one-fifth that of Bitcoin’s futures market. If Ether ETFs take just a share of that, it could amount to $100 million to $200 million in demand.
Fast forward to today, and issuers are clamoring to get their products out, with some putting up glitzy marketing campaigns for their funds. Still, the market has shown little enthusiasm toward the second-largest digital asset, with Ether down roughly 6% over the past two months to trade around $1 660. Bitcoin has also dropped during that stretch and is hovering around $28 000, down roughly 60% from its highs.
Crypto-based products have, overall, failed to generate much investor interest even with them being the best-performing equities ETFs this year. The top five best-performers are all crypto-related, according to Bloomberg data. They’re each higher by more than 80% in 2023. But they’ve collectively only gathered around $30 million in inflows this year.