Following a significant market crash that caused Ethereum to plummet by 23% in less than 24 hours, U.S. spot Ethereum ETFs experienced a notable increase in inflows. On August 5, there was an aggregate inflow of $49 million into the nine recently launched spot ETH ETFs. This surge marked the second-highest inflow day since the ETFs began trading, indicating a somewhat bullish sentiment among institutional investors.
ETF specialist James Seyffart supported the notion that institutional investors were buying the Ethereum dip. He noted on August 6 that “ETF investors, in aggregate, likely bought the dip on Ethereum today.” This affirmation further solidifies the belief that there was a deliberate effort by institutional investors to capitalize on the dip in Ethereum’s price.
Among the spot ETH ETFs, BlackRock’s ETHA fund led the pack with an inflow of $47.1 million, bringing its total funds to $760 million. VanEck’s ETHV and Fidelity’s FETH followed closely behind with inflows of $16.6 million and $16.1 million, respectively. Notably, the Grayscale Ethereum Mini Trust (ETH) also saw a substantial inflow of $7.6 million, reflecting investor interest in Ethereum despite the recent market turbulence.
In contrast to the positive inflows for Ethereum ETFs, Bitcoin funds witnessed outflows totaling $168.4 million on Monday. Fidelity, Ark 21Shares, and Grayscale all experienced outflows ranging from $58 to $70 million, while BlackRock and four others reported zero flows. The Grayscale Mini Bitcoin Trust recorded a minor inflow of $21.8 million, highlighting the distinct investor behavior between Bitcoin and Ethereum.
Despite the sharp decline in Ethereum’s price on August 5, the cryptocurrency showed signs of recovery during the Tuesday morning Asian trading session. Ethereum managed to reclaim $2,500, indicating a potential upward trend. However, for this trend to continue, Ethereum will need to surpass and sustain above the $2,900 resistance level. The pace of recovery may also be influenced by Bitcoin’s performance in the coming days.
Institutional investors’ response to the recent dip in Ethereum’s price has been largely positive, with significant inflows into spot ETH ETFs. This behavior contrasts with the outflows seen in Bitcoin funds, suggesting a divergence in investor sentiment between the two cryptocurrencies. The recovery of the Ethereum market and its ability to break key resistance levels will be crucial factors to monitor in the near future.