The debut of nine new Ethereum futures exchange-traded funds (ETFs) was met with a tepid response, as less than $2 million were traded across these funds on the first day of trading, lending some to question the viability of such offerings. This seems rather underwhelming when examining it against the backdrop of the financial fervor surrounding the launch of these innovation-heavy products.
Opacity cloak these innovative financial products, converting the dulcet calls of investment returns into confused echoes in unacquainted ears. After all, these ETFs are designed to track futures contracts tied to the value of Ethereum’s native currency, ETH, a concept that might elude the average investor. Eric Balchunas, a senior Bloomberg ETF analyst, succinctly summed up the lackluster performance with his comment: “Pretty meh day of volume” posted on Twitter.
Yet, one might argue that perspective is key. Hearkening back to the launch history of traditional finance ETFs, Balchunas notes that the volume witnessed was actually “quite a lot.” He also suggested that investors might be leaning towards spot ETF products over futures, delineating a pattern that could prove important for future product innovations. It might seem that the regulatory push towards futures ETFs, in order to prevent market domination by a single asset, is slightly at odds with investor preference.
The leading performer among the new arrivals was Valkyrie’s BTF, an ETF tracking a combination of Bitcoin and ETH futures. It witnessed $882,000 in trade volume, giving it a fleeting moment in the limelight. For some context, it is worth noting that BTF had been trading as a Bitcoin-only futures ETF since Oct. 2021, but adjusted its strategy to include ETH futures.
Drawing a parallel to more successful launches, the Ether ETFs lagged far behind the ProShares Bitcoin Strategy ETF (BITO), which saw a staggering $1 billion in trading volume on its first day in October 2021. While the reasons might be manifold, it comes amid an unusually robust market for crypto assets that might have favored Bitcoin-linked products.
While the excitement for Ether futures products was high, not every firm shared the same enthusiasm. ETF firm Volatility Shares, for example, canceled its plans to list a similar product, stating that it “didn’t see an opportunity” at the current time. As the crypto ecosystem continues to evolve, the mixed response to Ether futures ETFs sets the stage for further exploration and possibilities.
Source: Cointelegraph
