Cryptocurrency Price Movements Today: Ether Edges Lower on ETF Launches
Nine spot ether exchange-traded funds (ETFs) began trading on the stock exchanges Tuesday, but all the optimism ahead of their approval didn't translate into gains for the crypto markets.
Ether (ETH), the native cryptocurrency of the ethereum blockchain, traded down less than 1% around the $3,400 level as of 1:30 p.m. ET, while bitcoin (BTC) slipped more than 2% to around $66,000.
Spot ether ETFs began trading with just over $10 billion worth of assets under management (AUM), according to Bloomberg Intelligence analyst James Seyffart, with most of that money in the existing Grayscale Ethereum Trust (ETHE) that was converted into an ETF today.
«Long term Grayscale will simultaneously have the highest fee and lowest fee on the market. The asset manager’s decision to keep its ETHE fee at 2.5% could lead to outflows from the fund,» said Kaiko Research in a note Monday.
Outflows from ETHE, should they occur, would be similar to the ones faced by Grayscale's Bitcoin Trust (GBTC) after spot bitcoin ETFs began trading in January this year, most likely on account of the high fees for the two original funds. Grayscale's existing fund charges 2.5% fees, while a new «mini» ether ETF will charge 0.15% and fees for other ETFs are pegged at 0.25% or lower.
Those outflows could drag on ether's price and market sentiment.
«There could be a pushback a little while after the launch of Ethereum spot ETFs, that is outflows from the Grayscale Ether Trust may dampen market sentiment in the short while,» Hashkey Capital Liquid Fund Partner Jupiter Zheng told The Block.
But Grayscale remains optimistic.
«Relative to the splashy debut of spot Bitcoin ETPs in January, the launch of Ethereum ETPs has been comparatively low key,» said
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