Futures ETF Stumbles on Day One of Trading
In Brief
Despite an initial $2B trading volume for BTC futures ETFs, subsequent offerings like VanEck’s Ethereum Strategy ETF saw lackluster performance.
VanEck announced the launch of its Ethereum Strategy ETF under the ticker CBOE: EFUT. Designed as an actively managed ETF, it primarily targets capital growth by channeling investments into Ether (ETH) futures contracts.
The C-Corp offering represents one of the latest efforts to bring cryptocurrency-related financial instruments to the traditional market.
Despite the promising introduction of Bitcoin and Ethereum futures ETFs, the numbers tell a less-than-optimistic story. The BTC futures ETF noted an impressive trading volume of over $2 billion in its initial two days, with $200 million transacted in the starting 15 minutes alone.
However, this enthusiasm seemed to fizzle out when other futures ETFs showed trades falling below $10 million on their first day. The diminished activity could suggest that the demand from retail investors for cryptocurrency might have been overestimated.
Vaneck’s ETH Futures ETF
Although VanEck heavily promoted its ETH futures ETF, the trading volume on its first day barely scraped $400,000. Additionally, the fund’s commitment to support the Ether network’s developers stands at an almost symbolic $274, further emphasizing the unexpected muted response.
Key figures in the crypto space shared their insights:
DegenSpartan suggested that retail investors are yet to warm up to the current ETF formats. He believes that while the emergence of a spot ETF could see some fund shifts from larger platforms to more regulated ones, it might not necessarily expand the market. He also predicts a milder positive impact on crypto prices when spot ETFs finally roll out.
i think my conclusion is that there is zero pent up retail demand for eth in etf form
— 찌 G 跻 じ MBA, CFA, FRM, CFP, NGMI, HFSP, HENTAI 🛡️ (@DegenSpartan) October 3, 2023
and my next conclusion is that there will be zero pent up demand for any spot crypto etfs – initially it would just be cannibalization of positions elsewhere, rather than pie expansion
Basedcarbon highlighted the cyclical nature of demand. He envisions a scenario where spot products are woven into a broader array of investment tools. Drawing on humor, he mentioned how some older generation investors might inadvertently find themselves investing in crypto, depending on the specific growth indices they choose.
Demand is cyclical as is everything in life. The more important element is that a spot etf will be packaged into other products. Late stage dementia boomers won't even realize they're buying crypto just whatever growth index their advisor picked for them.
— davis 🐺🦊 (@basedkarbon) October 3, 2023
The restrained reception to these financial products drives home the point that the crypto market’s dynamics remain elusive. While there was palpable excitement leading up to these ETFs, the actual trading data conveyed a contrasting narrative. It serves as a testament to the unpredictable, yet always evolving, world of cryptocurrency investments.
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About The Author
Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
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Nik is an accomplished analyst and writer at Metaverse Post, specializing in delivering cutting-edge insights into the fast-paced world of technology, with a particular emphasis on AI/ML, XR, VR, on-chain analytics, and blockchain development. His articles engage and inform a diverse audience, helping them stay ahead of the technological curve. Possessing a Master's degree in Economics and Management, Nik has a solid grasp of the nuances of the business world and its intersection with emergent technologies.
