Bitwise CEO Hunter Horsley explains why Ethereum exchange-traded funds (ETFs) are experiencing lower trading volumes and inflows compared to Bitcoin ETFs.
In an Oct. 21 post on X, Horsley acknowledges the underperformance of Ethereum ETFs but highlights that funds from Bitwise, BlackRock, and Fidelity are among the top 25 fastest-growing new ETPs this year.
BlackRock’s ETHA attracted $1.45 billion in net inflows, while Fidelity’s FETH and Bitwise’s ETHW saw inflows of $498 million and $321 million, respectively.
Data shows that Ethereum ETFs have experienced negative flows of approximately $500 million due to the outflows from Grayscale Ethereum Trust and tepid demand for other ETH funds.
Why Ethereum ETFs are struggling
Horsley highlights reasons for Ethereum ETFs’ slow start, citing the timing of their launch as a key factor.
The Ethereum ETFs launched during a slow summer investment period, while Bitcoin ETFs entered the scene during a bull market, garnering more attention and investment.
Horsley notes that many investors were still focused on Bitcoin when Ethereum ETFs debuted, making it challenging for Ethereum to capture the spotlight.
What about staking?
Horsley addresses concerns about the lack of staking features impacting Ethereum ETFs, stating that most ETH holders aren’t currently staking their assets.
He mentions Bitwise’s European franchise offering a fund (ET32) that captures staking rewards, highlighting its success and potential benefit for US-based funds.
Despite challenges, Horsley believes it’s too early to judge Ethereum ETPs’ long-term potential, stating that “the story for Ethereum ETPs is just beginning.”
