Ethereum Price Declines Despite US ETF Launch

Ether exchange-traded funds (ETFs) made their debut trading in the U.S. on Tuesday, providing investors with a new opportunity to engage with the second-largest cryptocurrency.

Despite anticipations that Ether’s price would experience a significant increase on the launch day of the ETFs, the market response was not as expected, resulting in a decline for both the cryptocurrency and the ETFs. Over the past 24 hours, Ether fell nearly 4%, hitting a low of $3,300, marking its weakest performance in two weeks.

This price dip may reflect a “buy the rumor, sell the news” phenomenon, indicating that the launch had already been factored into market prices, leading to short-term investors capitalizing on profits. Moreover, Ether’s drop occurred alongside a broader downturn in the U.S. stock market, where the Nasdaq fell by 3.6%, and the S&P 500 dropped 2.1%, influenced by underwhelming earnings reports from major corporations.

In contrast, Bitcoin prices remained relatively steady around the $66,000 mark. The newly introduced Ether ETFs garnered a combined trading volume exceeding $1 billion, with BlackRock’s iShares Trust (ETHA) leading with a volume of $240 million, followed closely by the Fidelity Ethereum Fund (FETH) at $136 million.

Interestingly, the trading volumes of the Ether ETFs represented approximately 21% of the $4.66 billion in trading volume seen on the inaugural day of spot Bitcoin ETF trading in January. However, the spot Ether ETF market exhibited more activity compared to the futures-based Ether ETFs, which had a quieter launch in October.

Since their release, Bitcoin ETFs have attracted around $17 billion in net inflows, marking a historically strong debut. In contrast, Ether ETFs are expected to attract less due to the differences in market size and investor awareness. While Bitcoin is often hailed as digital gold, Ether is perceived more as an investment in the advancement of blockchain technology and the overall cryptocurrency landscape.

With the introduction of Ether ETFs, traders are now directing their attention to upcoming U.S. economic data releases scheduled for Friday and a speech by former President Donald Trump at the Nashville Bitcoin conference on Saturday.