Ether (ETH) experienced a notable decline of over 7.5% in early trading hours in East Asia, falling to a level above $3,100. This drop came amid increasing investor concerns regarding substantial outflows from Grayscale’s recently converted Ethereum Trust ETF (ETHE).
Outflows from Grayscale’s ETHE Reach $327 Million
According to market data from SoSoValue, Grayscale’s Ethereum Trust ETF reported a net outflow exceeding $327 million during Wednesday’s U.S. trading session. Since its launch, the fund has witnessed total outflows surpassing $800 million. This pattern resembles the initial performance of Grayscale’s Bitcoin Trust (GBTC), which also faced considerable outflows in the early weeks of Bitcoin ETF trading earlier this year.
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Competing Ethereum ETFs Attract Inflows
While ETHE struggled with outflows, most other Ethereum ETFs recorded positive inflows during the same trading period. BlackRock’s iShares Ethereum Trust (ETHA) led the group with an inflow of $283.9 million. It was closely followed by Bitwise’s Ethereum ETF (ETHW), which attracted $233.6 million, and Fidelity’s Ethereum Fund (FETH), with $145.7 million in inflows.
Ethereum’s Recent and Yearly Performance
Despite a 6% decline over the past month, Ether has demonstrated strong long-term performance, registering a 72% gain over the last year. Moreover, Ethereum has outperformed the CoinDesk 20 (CD20) index—which tracks some of the largest digital assets—year-to-date. While the CD20 increased by 21.6%, Ether’s value grew by 35% during the same period.
Correlation with Nvidia and Broader Tech Trends
Ethereum’s price movement has shown a notable correlation with the stock performance of technology giant Nvidia (NVDA). On the day of Ether’s decline, Nvidia shares also fell by over 6%. This relationship is not new; cryptocurrency prices, including Ethereum, have maintained a strong correlation with Nvidia's stock for much of the year, highlighting the growing intersection between tech equities and digital assets.
Frequently Asked Questions
Why did the price of Ether drop significantly?
Ether’s price decline was influenced by substantial outflows from Grayscale’s Ethereum Trust ETF (ETHE), which exceeded $327 million in a single day. Market sentiment was also affected by a broader sell-off in tech stocks, including Nvidia.
How do Ethereum ETF flows affect the market?
Large outflows from a major fund like ETHE can signal declining investor confidence, leading to downward pressure on Ether’s price. Conversely, inflows into competing ETFs may help stabilize or boost the market by reflecting renewed interest.
What is the relationship between Nvidia and Ethereum?
Ethereum and other cryptocurrencies have shown a strong correlation with Nvidia’s stock price. This is partly because Nvidia’s graphics processing units (GPUs) are used in cryptocurrency mining, linking its market performance to digital asset trends.
Are other Ethereum ETFs performing better than Grayscale’s?
Yes, other Ethereum ETFs, such as those offered by BlackRock, Bitwise, and Fidelity, recorded significant inflows during the same period, suggesting that investor interest remains strong despite Grayscale’s outflows.
What does Ethereum’s year-long performance indicate?
Despite recent volatility, Ethereum has posted strong gains over a longer horizon, rising 72% in the past year. This indicates sustained investor confidence and growing adoption of the Ethereum network and its applications.
Where can I monitor real-time cryptocurrency ETF flows?
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