Ethereum spot ETFs might have seemed like the next big thing when they hit the U.S. market on July 23, but they’ve been more of a fizzle than a bang. Despite the hype, these funds have seen net outflows of $500 million since their debut, according to a recent research report by JPMorgan (JPM). Compare that to the Bitcoin ETFs that launched six months earlier—they raked in over $5 billion during the same post-launch period. The numbers tell a stark story: Bitcoin is still dominating the crypto ETF game.
Bitcoin’s “First Mover Advantage” Steals the Show
JPMorgan’s team, led by Nikolaos Panigirtzoglou, wasn’t entirely surprised by the sluggish performance of Ethereum ETFs. They pointed out Bitcoin’s “first mover advantage,” which has given it a more established presence in the market. Moreover, Ethereum’s (ETH-USD) lack of staking and lower liquidity makes it less appealing to institutional investors who are looking for both security and profitability. “Weaker demand for spot Ethereum ETFs compared to Bitcoin” is leading some asset managers to eye a new strategy—filing for a combined ETF that offers exposure to both Bitcoin (BTC-USD) and Ethereum.
Grayscale’s Ether ETF Falls Short of Expectations
The real kicker, though, was the unexpected outflow of $2.5 billion from Grayscale’s Ethereum Trust (ETHE). This was way above the $1 billion outflow that JPMorgan had anticipated. In an effort to counter this trend, Grayscale launched a mini Ethereum ETF, but it’s only managed to attract $200 million in inflows—a drop in the bucket compared to the outflows.
Retail Investors Keep the Faith in Bitcoin
Interestingly, retail investors continue to hold the lion’s share of spot Bitcoin ETFs—around 80%, according to the same report. It’s clear that Bitcoin’s appeal remains strong among retail investors, many of whom have likely been snapping up these ETFs either directly or through investment advisors.
Investors looking to invest in Bitcoin or Ethereum ETFs can compare which one suits them best using TipRanks’ ETF comparison tool.
