Grayscale’s ETH ETF struggles with outflows, dragging Ethereum’s price

• Ethereum ETFs saw significant outflows, overshadowing total flows.
• Crypto analyst ZERO IKA warned that ETFs may not be inherently bullish for assets.

Since the launch of Ethereum [ETH] Exchange-Traded Funds (ETFs), the anticipated surge in Ethereum’s price to $4,000 has yet to materialize.

In reality, ETH has faced a decline, trading at $2,584 at press time, down 2.94% over the past 24 hours, according to CoinMarketCap.

ETH ETF market trend

Moreover, Ethereum ETFs have experienced a notable net outflow of $6.5 million as of the 20th of August, with the trend of outflows persisting since the 15th of August, per Farside Investors.

A closer examination of the data revealed a striking pattern wherein Grayscale’s ETHE has been enduring a continuous outflow streak that significantly overshadows the total flows for ETH ETFs.

As of the 20th of August, ETHE alone accounted for $37 million in outflows, contributing to the overall $6.5 million net outflow for Ethereum ETFs.

Since its inception, ETHE has seen a staggering net outflow of $247.8 million, while the total net ouflow across all Ethereum ETFs stands at $440.5 million.

Execs defy ETF notion

However, despite the widespread belief that the launch of ETFs is inherently bullish for Ethereum and other assets, crypto analyst ZERO IKA argue, 

“The thing that ETFs are just “bullish engines” is as far from reality as possible.” 

He further added, 

“The last method seems completely out of everyone’s mind and there’s this “echo chamber” in which the majority believe that ETF ~> bullish. “ 

Here, ZERO IKA challenged the common notion that ETFs automatically drive up asset prices.

Instead, he warned that ETFs are often leveraged by institutions and hedge funds as profit-generating tools, utilizing strategies such as both buying (longing) and selling (shorting) assets.

This perspective suggests that ETFs are not merely bullish instruments but can be used to manipulate markets for institutional gain, casting doubt on their supposed positive impact on asset values.  

BTC ETF market trend

Interestingly, Grayscale’s Bitcoin [BTC] ETF (GBTC) has also experienced periods of significant outflows, mirroring the trends seen with Ethereum ETFs as per Farside Investors.

On certain days, the outflows from GBTC have exceeded the net outflows of the broader Bitcoin ETF market, highlighting similar patterns of institutional movement and potential market manipulation.