On October 2, nine Ethereum futures ETFs were launched on the Chicago Board Options Exchange (CBOE) in the US. On the first day of trading, the total trading volume was less than $2 million. This seems to be a very small number compared to a similar Bitcoin futures ETF launched two years ago.
What is an Ethereum futures ETF and why is it needed
An Ethereum futures ETF is a financial instrument that allows investors in the traditional market to invest in securities backed partly or fully by Ethereum futures. These ETFs are available to all participants of the CBOE.
Such instruments are suitable for those who want to invest in cryptocurrencies and avoid interacting with exchanges. Plus, it looks more legal and safe for people.
The US Securities and Exchange Commission (SEC) is rather strict on spot ETFs, so various companies are getting around the restrictions by launching futures ETFs, which the regulator has already approved.
To learn more about ETFs and the difference between spot and futures ETFs, read our article: What is a spot bitcoin ETF, and why does everyone talk about it?
Key figures of Ethereum futures ETFs first day
A total of nine ETFs were launched by six companies: ProShares, VanEck, Bitwise, Valkyrie, Kelly, and VolShares. Five of the ETFs contain futures only on Ethereum, and four offer a mixed strategy, Bitcoin plus Ethereum. The key difference in the products is the size of the expense ratio.
In a nutshell, the expense ratio is the fee that funds charge each year. Read more about it here.
Bloomberg analyst Eric Balchunas aired trading volume data for each of the funds on the first day. The key figures of volume traded are as follows:
📈 Valkyrie's BTF (Bitcoin + Ethereum) has the highest volume at approximately $882,000;
📉 ProShares' BETH (Bitcoin + Ethereum) has the smallest volume at approximately $4,700;
👀The total volume is approximately $1.8 million.
Earlier, the VanEck company, whose ETFs had a third largest first-day trading volume of $312,029, promised that it would invest 10% of its profits from this fund in the development of Ethereum’s ecosystem through donations to the Protocol Guild organisation.
Protocol Guild organisation consists of about 152 developers who are making a major impact on the blockchain's development.
Is a $1.8 million Ethereum futures ETFs trading volume a big or a small?
Actually, it depends. However, when compared to Bitcoin futures (BITO) launched on October 19, 2021, this number seems to be small. Then, the trading volume was a billion dollars, which is 500 times more.
Eric Balchunas believes that comparing new ETFs with BITO is not correct. As he states, the latter was launched at the peak of the 2021 bull rally. Besides, Bitсoin's popularity among traditional investors is much higher.
A popular crypto influencer under the nickname DegenSpartan thinks that this situation reflects the lack of interest in ETH among retail investors.
In general, the influencer also expressed scepticism towards spot ETFs, saying that they are more likely to be an instrument of redistributing funds that already exist in the market than attracting new money. Moreover, in DegenSpartan’s opinion, spot ETFs are not worth expecting strong growth in the crypto market.
Market reaction
On October 2, ETH’s price fell by 4.5%. Currently, the asset is trading at around $1,650.
On October 1, before the ETFs launch, ETH’s price hit $1,751, which is the highest result since August 29 (black horizontal line on the chart above).
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What is a spot bitcoin ETF, and why does everyone talk about it?
