Ether exchange-traded funds (ETFs) began trading in the U.S. on Tuesday, offering investors a new vehicle to invest in the world’s second-largest cryptocurrency.
Contrary to expectations that Ether’s price would surge on the day the ETFs launched, the market did not react favorably to either the token or the ETFs.
The major altcoin dropped nearly 4% over the past 24 hours to a low of $3,300, its weakest price in two weeks.
The decline may be due to a “buy the rumor, sell the news” scenario, where the launch was already priced into the market, prompting short-term investors to take profits.
That said, the drop in Ether price coincided with a broader downturn in the U.S. stock market. The plunged 3.6%, and the slumped 2.1% due to disappointing earnings from major companies like Alphabet (NASDAQ:) and Tesla (NASDAQ:).
However, price remained relatively stable around the $66,000 level.
The new Ether ETFs saw a combined trading volume of just over $1 billion. Of the newly launched funds, BlackRock (NYSE:)’s iShares Trust (ETHA) recorded the highest volume at $240 million, followed by the Fidelity Ethereum Fund (FETH) at $136 million.
Interestingly, the trading volumes for the Ether ETFs were about 21% of the $4.66 billion seen on the first day of spot Bitcoin ETF trading back in January. But the spot Ether ETF market was more active than the futures-based Ether ETFs, which saw limited activity upon their debut in October.
Bitcoin ETFs have accumulated about $17 billion in net inflows since their launch in January, a historically successful debut. However, Ether ETFs are expected to be smaller due to the relative market sizes and investor familiarity. While Bitcoin is often touted as digital gold, Ether is viewed more as a bet on the growth of blockchain technology and the broader cryptocurrency market.
With the launch of Ether ETFs, traders are now shifting their focus to upcoming U.S. economic data releases on Friday and former President Donald Trump’s speech at the Nashville Bitcoin conference on Saturday.
