Ethereum futures ETFs get off to slow start

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Ethereum futures ETFs get off to slow start

Six ETH futures ETFs have gotten off to a slow start since they launched on Monday. The funds attracted just under $2 million in trading volume.

Investors haven't given up on Ethereum's futures ETFs.

K33 Research's Vetle Lund said the launch of six Ethereum futures ETFs in the US on Monday was 'disappointing'.

The'shallow flows depict a hollow market and a deficient demand for Ethereum exposure,' he said.

Futures ETFs are based on the future value of an asset, while spot ETFs are based on the current value of an asset.

There is no crypto spot ETF approved by US regulators yet, but many big financial firms have applied to launch them, such as BlackRock and Fidelity.

ProShares' EETH and VanEck's EFUT were the most popular Ethereum-only funds, with a trading volume of around $850,000 and $500,000.

Nearly half of EFUT's trading volumes occured during its first minute of trading, Lund said.

ProShares is likely to lead the way in the near future when it comes to Ethereum, similar to Bitcoin futures ETFs.

While Bitcoin's launch mirrored Bitcoin's 2021 debut, it was completely different when it comes to volume.

Bitcoin futures ETFs clocked up over $1 billion in trading volume in just two days - ProShares' BITO did $200 million in the first 15 minutes.

ProShares's BITO, which broke records, launched at the height of the bull market in 2021 - a more opportune environment, as Lund said.

Bitcoin is also more popular among those with a casual interest in cryptocurrency, said Bloomberg Intelligence ETF analyst Eric Balachunas.

Crypto market makers QCP Capital said a futures ETF could result in synthetic trading activity without actually impacting spot supply.

Futures contracts are bought by traders, speculating on the price at a future date, and they don't have to hold Ethereum - unlike buying a spot product that holds the underlying asset and therefore affects spot supply.

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Adam Morgan McCarthy, the London-based Markets Correspondent, is the Editor-in-Chief of DL News.