On Monday, investors funneled millions into U.S. spot Ethereum ETFs despite a volatile global market experiencing widespread sell-offs and recession fears.
The Dow Jones Industrial Average fell by 2.6%, the S&P 500 by 3%, and the Nasdaq Composite by 3.43%, marking their worst day since September 2022. These declines were driven by disappointing U.S. jobs data and shrinking manufacturing activity, which intensified recession fears.
Japan’s Nikkei 225 also plummeted over 12%, its largest single-day drop since 1987, following the Bank of Japan’s unexpected interest rate hike last month.
Despite the turbulent backdrop, Ethereum ETFs saw a net inflow of $48.7 million on Monday, according to SoSoValue data, marking the second-largest daily inflow since their approval on July 23. Ethereum rebounded from Monday’s sell-off, rising over 10% to $2,552, according to CoinGecko data.
Ethereum ETFs are trading in the U.S., but the price hasn’t surged yet. ETH has dropped 8.2% over the week since the ETFs launched, causing investors to question when the price will rise due to new funds buying ETH and increasing scarcity. Market analysts believe it will take time before the ETFs impact the price significantly.
Pav Hundal, lead market analyst at Swyftx, told Decrypt, “ETFs are going to become an increasingly important bellwether for the health of the crypto market.” He noted the market’s volatility, stating, “Meanwhile, you have ETF investors with long-term strategies calmly buying Ethereum.”
Despite the strong daily performance, the cumulative total net inflow remains at -$461.98 million, reflecting significant outflows from previous weeks. Grayscale’s Ethereum ETF, in particular, continues to drag on cumulative inflows, with a net figure of -$2.16 billion.
All other eight funds listed, including Fidelity’s and BlackRock’s, have recorded positive daily and cumulative net inflows since their launch two weeks ago. Hundal commented on the overall sentiment, saying, “If inflows remain strong or steady, it is a good indicator that the smart money expects this to be a short-lived market correction. If we start to see sustained outflows or inactivity, it could signal the start of something more sinister.”
Bitcoin ETFs have also faced significant fluctuations. On Monday, the asset’s U.S.-based funds recorded a net outflow of $168.44 million, contributing to a cumulative total net inflow of $17.34 billion.
Credit: Decrypt (Text Excluding Headline)
