October 21, 2024 – (San Francisco) Bitwise CEO Hunter Horsley is behind the lackluster performance of the newly introduced Spot Ethereum Exchange Traded Fund (ETF) in contrast to its Bitcoin counterpart We dig into the reasons in detail.
Horsley acknowledged in an Oct. 21 post that the performance of Ethereum ETFs has been relatively lackluster, but said his company's products are among the fastest-growing new ETPs this year, along with BlackRock and Fidelity. He emphasized that he was in the top 25.
According to data provided by SoSoValue, BlackRock's ETHA recorded net inflows of $1.45 billion, while Fidelity's FETH and Bitwise's ETHW recorded inflows of $498 million and $321 million, respectively. I am doing it.
Despite these notable numbers, Ethereum ETFs have total negative flows of approximately $500 million, primarily due to significant outflows from the Grayscale Ethereum Trust and subdued demand for other ETH funds in the market. This is due to
Horsley elaborated on the challenges faced by the Ethereum ETF, noting that the timing of its launch is a key factor influencing its initial performance.
He said the Ethereum ETF was introduced during a traditionally slow period of investment activity over the summer, when investors typically tend to take a more cautious approach and monitor market trends rather than taking on new ventures. He pointed out that there is. In contrast, Bitcoin ETFs emerged during a bullish phase of the market and attracted more attention and investment. This scenario has led to widespread interest in Bitcoin among investors, overshadowing the debut of the Ethereum ETF.
Horsley addressed concerns about the lack of staking functionality affecting Ethereum ETFs, stating that the lack of staking yield is not a significant hurdle as most ETH holders are not currently actively staking their assets. He expressed his belief that there is no such thing.
Nevertheless, Horsley highlighted the success of Bitwise's European franchise, offering a fund (ET32) that not only provides exposure to Ethereum but also earns staking rewards, a feature that has been well-received. He said that he is growing. He suggested it could be beneficial to incorporate similar functionality into US-based funds.
Staking plays a vital role in Ethereum's Proof of Stake (PoS) mechanism, where users lock up Ethereum to verify transactions and earn rewards. However, after the U.S. Securities and Exchange Commission (SEC) raised regulatory concerns that staking services could be considered an unregistered securities offering, ETF issuers became cautious and removed staking from their funds. Now excluded.
Despite the challenges faced, Horsley remains optimistic about Ethereum ETP's long-term potential, saying the story surrounding Ethereum ETP is only in its early stages and that only time will reveal its true trajectory in the market. I claim that it will happen.
