Grayscale’s Ether ETF Enjoys First Outflow-Free Day: What It Means for ETH

• Spot ether ETFs have snapped out of a three-day outflow streak.
• Amid recent inflows, Grayscale’s ETHE product has hit a key milestone.
• Grayscale’s ETHE milestone has been celebrated amid its bullish potential for ETH.

Over the past few months, much attention has been paid to Ethereum (ETH) as crypto community members excitedly anticipated the launch of ETFs backed by the asset. At the time, the hope was that ether’s price would soar, driven by billions of dollars in anticipated inflows into these products.

Two weeks after the launch of these products, however, these hopes have yet to materialize, with ether’s price even experiencing a massive drawdown led by macroeconomic factors and relentless selling pressure , leading to dampened sentiment around the asset. Amid the doldrums, a recent Grayscale ether ETF milestone may mark the beginning of a shift.

Jubilation as Grayscale’s Ether ETF Outflows Pause

After recording outflows for three consecutive trading days, flows to spot ether ETFs again flipped positive on Monday, August 12, with $5 million in net inflows, per Farside Investors data . While the end of the outflow streak to spot ether ETFs is a positive development, the flows have been overshadowed by excitement over a critical milestone clinched by Grayscale’s larger ether ETF fund, ETHE, on Monday.

Table showing spot ether ETF flows since launch
Source: Farside Investors

On Monday, outflows from Grayscale’s ETHE, which have hounded inflows to other spot ether ETFs since launch, stopped. Grayscale’s ETHE had zero outflows for the first time since spot ether ETFs launched, ending a 14-day streak that had seen the product hemorrhage over $2 billion worth of assets. The development follows a steady decline in outflows from the product over the past ten days. 

The pause in outflows Grayscale’s ETHE has been celebrated as many believe it is one of the key events needed for inflows to ether ETFs to finally make their mark on the asset’s price.

Is Ethereum (ETH) Set to Rip?

Several factors must be considered when analyzing ETH’s prospects in the short term, including shifting macroeconomic winds.

The impact of macroeconomic factors on ETH’s price became significantly glaring following last week’s market crash as moves by the Bank of Japan to raise rates and whispers of a U.S. recession sent investors into a panic. However, with Japan suspending plans for a tightening monetary policy regime, fears around the unraveling of Japanese carry trade that would have seen significant amounts of capital exit risk markets have now been eased. 

As for the speculation around a U.S. recession, July’s Consumer Price Index (CPI), set to be released on Wednesday, August 14, will likely offer investors better insight into the veracity of these claims.

From a technical standpoint, Ethereum currently appears to be holding key weekly support levels against Bitcoin and the U.S. dollar, as highlighted on Monday, August 12, by prominent trader “DonAlt.” If the levels hold, ETH could make a dash for the $3,000 price point soon. Failure to hold the support levels, however, could see the asset’s price dip below the $2,000 price point.

At the time of writing, ETH continues to idle around the $2,600 price point, trading at $2,634.35, per CoinMarketCap data .

On the Flipside

• Grayscale’s ETHE still boasts ETH holdings worth over $5 billion at the time of writing.
• Total flows to Ethereum ETFs since launch remain negative, with a net outflow of over $400 million.

Why This Matters

In light of Grayscale’s astronomically high ETHE fees, analysts had anticipated a rough first few weeks for spot Ethereum ETF products. However, the recent pause in ETHE’s outflows suggests that the worst may be over in a shift that could significantly boost ETH’s price.

Read this for more on spot Ethereum ETF flows:
Ethereum ETF Sees $105M Surge Amidst Shadows of a Death Cross

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