In early June, ETH ETF inflows reached record highs, yet the price of the coin failed to maintain its levels due to a decline in speculative interest.
Significance of ETF Inflows for Ethereum
Institutional interest in Ethereum remained high throughout Q2, with ETH ETF inflows significantly increasing in April and May. In May, inflows reached $564 million and surpassed $1 billion by late June. However, the price of ETH fell from its peak of $2800 to around $2100 before slightly recovering.
It is worth noting that these inflows did not lead to a sharp rise in token prices, as ETH remained between $2800 and $2300 for most of June, with low speculative interest.
Decline in Derivative Demand
Futures Open Interest (OI) data also indicated a slowing pace of growth during the quarter. OI increased by $17 billion to $41 billion when the price of ETH doubled. However, since mid-June, OI has fallen by $10 billion to $31 billion, indicating waning future demand. This decline coincided with ETH dropping to $2100, aligning with low speculation.
Options Market Signals for Q3
Short-dated options showed brief optimism in early June but quickly shifted to a more pessimistic sentiment. The 25 Delta Skew fell back to 1% and 3%, indicating growing demand for protective puts ahead of Q3. These shifts in the options market reflect cautious positioning from traders despite ongoing ETF inflows.
Despite significant inflows into ETH ETFs, indicating high institutional interest, short-term prospects remain questioned due to declining speculative activity and bearish signals from the derivatives markets.
