Bitwise CEO Hunter Horsley believes trading volumes and inflows for the recently launched Spot Ethereum exchange-traded fund (ETF) are significantly lower than its Bitcoin counterpart. I explained the reason.
In an Oct. 21 post on He pointed out that it is in the top 25 of ETPs.
BlackRock's ETHA had net inflows of $1.45 billion, while Fidelity's FETH and Bitwise's ETHW saw $498 million and $321 million in inflows, respectively, according to SoSoValue data. .
Overall, the data shows that the Ethereum ETF is experiencing negative flows of approximately $500 million, thanks to significant outflows from the Grayscale Ethereum Trust and low demand for other ETH funds .
Why Ethereum ETFs are struggling
Horsley highlighted several reasons behind the Ethereum ETF’s slow start, explaining that one of the key factors impacting the product was the timing of its launch.
He said the Ethereum ETF was launched in the summer, a traditionally slow investment period when investors monitor market activity rather than take on new projects.
He further said that while the Ethereum ETF debuted in a relatively flat market, the Bitcoin ETF emerged in a bull market and attracted more attention and investment. Horsley noted that when the Ethereum ETF was launched, it was difficult for Ethereum to gain traction because many investors were still focused on Bitcoin.
He explained:
“For many traditional investors, it has been and will continue to take some time to figure out how to incorporate Bitcoin after the launch of ETPs. has arrived, making it difficult to pay attention to it.”
What about staking?
Horsley also addressed concerns about whether the lack of staking functionality is having a significant impact on Ethereum ETFs.
The Bitwise CEO noted that most ETH holders are not currently staking their assets and said he does not believe the lack of staking yield is a significant issue.
However, Horsley highlighted the success of Bitwise's European franchise, which offers a fund (ET32) that provides exposure to Ethereum while earning staking rewards. He said the fund was “growing well” and that similar features would benefit U.S.-based funds.
Staking is a key element of Ethereum's Proof of Stake (PoS) system, where users lock up Ethereum to verify transactions and earn rewards. However, the US Securities and Exchange Commission (SEC) has expressed concern that staking services may amount to offering unregistered securities and has taken legal action against crypto platforms like Kraken. I did.
ETF issuers have understandably responded to these legal risks by removing staking from their funds.
Despite these challenges, Horsley stressed that it is too early to judge the long-term potential of Ethereum ETPs. He believes that “the Ethereum ETP story is just beginning.”
