Ethereum ETFs on Hold: Outflows Continue Despite Potential Options Trading Boost

The highly anticipated options trading for Ethereum ETFs has hit a snag, with the SEC pushing back its decision to November 2024. This news comes as Ethereum ETFs continue to underperform, experiencing their largest outflow since July at $79.2 million on September 23rd.

BlackRock, Bitwise, and Grayscale in Limbo

Major players like BlackRock, Bitwise, and Grayscale are waiting for the SEC’s green light to offer options trading for their Ethereum ETFs. This feature would allow investors to speculate on price movements or hedge their bets, adding flexibility to their strategies. However, the SEC is taking its time to ensure a thorough review of the proposals.

Ethereum ETFs Struggle to Gain Traction

Despite the initial excitement surrounding Ethereum ETFs, they have failed to attract consistent institutional interest. Grayscale’s Ethereum Trust (ETHE) faced the brunt of the recent outflows, losing $80.6 million, bringing its total net outflow to a staggering $2.85 billion. In contrast, Bitwise’s ETHW saw a modest inflow of $1.3 million.

ETH Underperforms Bitcoin as Ripple ETF Looms

The lackluster performance of Ethereum ETFs reflects in the price of ETH itself. It continues to underperform Bitcoin, currently trading at levels last seen in April 2021. This decline coincides with the recent all-time high for Bitcoin. Additionally, Grayscale’s launch of the first XRP Trust in the US raises concerns about potential competition from Ripple’s XRP ETF in the future.

Analysts Remain Bullish on Ethereum

Despite the current challenges, some analysts remain optimistic about Ethereum’s future. Research firm ASXN previously predicted significant monthly inflows for Ethereum ETFs, while Bitwise’s Matt Hougan compared Ethereum to the “Microsoft of blockchains,” expecting a price reversal in Q4 2024.

Ethereum Price Eyes Upsides

While the SEC decision hangs in the balance, Ethereum’s price shows signs of potential upside. It currently trades above $2,620 and is forming a bullish triangle pattern. An upward break could see ETH reach resistance levels near $2,700 and potentially climb higher in the near term. However, a failure to break through resistance could trigger another decline towards the $2,600 support zone.

ABOUT THE AUTHOR See More

Arslan Butt

Index & Commodity Analyst

Arslan Butt serves as the Lead Commodities and Indices Analyst, bringing a wealth of expertise to the field. With an MBA in Behavioral Finance and active progress towards a Ph.D., Arslan possesses a deep understanding of market dynamics.His professional journey includes a significant role as a senior analyst at a leading brokerage firm, complementing his extensive experience as a market analyst and day trader. Adept in educating others, Arslan has a commendable track record as an instructor and public speaker.His incisive analyses, particularly within the realms of cryptocurrency and forex markets, are showcased across esteemed financial publications such as ForexCrunch, InsideBitcoins, and EconomyWatch, solidifying his reputation in the financial community.

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