Overview

Grayscale's ETHE encountered significant outflows totaling $1.51 billion in its inaugural trading week, leading to a notable 7% decline in the price of Ethereum (ETH). This downturn coincided with the launch of U.S. spot ETH ETFs. The outflows impacted ETH's market price, causing it to dip from $3.5k to $3k.

Expectation of Outflows Stabilization

Coinbase analysts anticipate a potential easing of the outflows concerning ETHE following the next week. A comparison between ETHE and GBTC revealed that ETHE faced outflows of -$484M and -$327M in its initial two trading days, whereas GBTC experienced -$95M and -$484M outflows, despite managing significantly higher assets under management (AUM).

Analysts, David Duong, and David Han, speculate that the severe outflows from ETHE may be a transient phenomenon, distinct from GBTC's protracted three-month outflow period. They posit that once ETHE's AUM diminishes by 53%, a shift towards net inflows could transpire.

Divergent Views from QCP Capital

Conversely, analysts at QCP Capital express a more pessimistic outlook towards ETH post the spot ETF launch. They argue that the absence of staking features renders ETF products less attractive to investors. The high 2.5% fee levied by Grayscale is identified as a significant factor driving the outflows. Even the introduction of Grayscale's Mini ETF variant has failed to stem the outflows.

Consequently, the ETH ETF is characterized as a 'buy the hype, sell the news’ event. Concurrently, the Stochastic RSI hints at a potential price reversal for ETH, although a substantial rebound might face delays. In such a scenario, a retest of the $3.0k level could occur before ETH optimists endeavor to surpass the resistance thresholds at $3.5k and $4k.