Ethereum’s native token, Ether (ETH), has declined sharply a day after spot Ethereum ETFs were launched in the United States.
Ether suffers sell-the-news phenomenon
ETH’s price has fallen by approximately 8.75% in the past 24 hours, reaching around $3,170 on July 25. This decline followed the launch of eight spot Ether ETFs on the New York Stock Exchange, erasing nearly two weeks of prior gains and suggesting a “sell-the-news” reaction in the Ethereum markets.
ETH/USD four-hour price chart. Source: TradingView
“Sell-the-news” is a trading strategy where investors sell assets immediately after a highly anticipated event or news release. This often occurs despite the positive news, as the event may have already been priced in during the lead-up period.
Related: Ethereum ETF sell-off signals more trouble — 10x Research
In January, Bitcoin (BTC) had fallen similarly after the launch of its nine spot ETFs in the US.
Ether ETFs witness net outflows on day two
Ether’s decline today was exacerbated by $113.3 million in outflows from its spot ETFs on their second trading day on July 24, primarily due to substantial withdrawals from Grayscale’s Ethereum Trust.
Notably, seven of the eight newly launched spot Ether ETFs saw net inflows. Leading the charge, the Fidelity Ethereum Fund (FETH) and the Bitwise Ethereum ETF (BITW) attracted $74.5 million and $29.6 million, respectively.
Ethereum ETF net flows daily. Source: Farside Investors
In contrast, BlackRock’s iShares Ethereum Trust (ETHA), which had the strongest inflows on July 23, garnered only $17.4 million from investors on July 24.
On the other hand, Grayscale Ethereum Trust (ETHE) experienced a staggering $326.9 million in outflows, similar to the withdrawals witnessed after the Grayscale Bitcoin ETF launch in January, due to its relatively higher fee. ETHE’s fees are also the highest among all at 2.5%.
Ethereum ETFs fee comparison. Source: Issuer Filings
Nevertheless, Grayscale’s Ethereum Mini Trust (ETH), with a 0.15% fee, attracted $15.1 million on July 24. This hints at traders rotating their capital out of Grayscale Ethereum Trust to seek opportunities in…
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