This is a segment of the Forward Guidance Newsletter. Subscribe to read the full edition.
An Ether ETF was released in the US a year ago. Time flies.
These products (unlike Bitcoin ETFs) struggled to find a consistent inflow from the gate, but this month it was a different story.
The ETH fund has collected $3.6 billion in net capital from July 1 to July 22, Farside investors data shows.
Last week’s segment’s $2.1 billion inflow was nearly twice the previous $1.2 billion record. As James Butterfill of Coinshares pointed out in a report Monday, inflows over the past 13 weeks represent 23% of ETH products.
Loading Tweets…
Rather than mere speculative transactions, institutional demand has helped to drive the latest inflows. Corporate’s finances added more than 600,000 ETH to its balance sheet this month alone, according to Blockworks Research.
Perhaps I remember Sharplink Gaming, listed on Nasdaq in May, revealed its ethereal financial strategy (and Ethereum co-founder Joseph Lubin was board chair). The company’s Ether Holdings was 360,807 ETH as of July 20th, an increase of 29% from a week ago.
Bitmine last week said it had around $1 billion in ether and its goal was to win 5% of its total ETH supply and bet.
Globe 3 Capital Cio Matt Lason previously said that the combination of ETH’s rarity, deflation and yield makes it an ideal asset for your financial strategy. Sharplink’s ETH staking rewards have risen to 567 ETH since launching the strategy on June 2nd.
Bitwise CIO Matt Hougan highlighted in a memo on Tuesday that ETPS and public companies have purchased 2.83 million ETH (valued to $10 billion today) since mid-May. This is 32 times the increase in ETH supply over that period, he said.
So it’s not surprising that ETH prices rose by around 60% last month.
As we mentioned staking earlier, it should be noted that various asset managers can submit to the SEC to wager a portion of the underlying holdings that the ether ETF can. BlackRock joined the movement last week, and the world’s biggest asset managers usually get what they want from the SEC – perhaps to know if they have an influence or when regulators are ready to approve the proposal. Probably both.
SEC Commissioner Hester Perth sought patience with the SEC, which greenlights modifications such as staking and in-proper work and redness. Still, many segment observers expect their approval to be imminent.
Investors remain at a decline in etheric ETFs, Hougan writes in his notes. ETH has a market capitalization of about 20% of Bitcoin, while ETH ETP is only 12% of BTC products’ assets.
“We think that will change with all the excitement surrounding stubcoin and tokenization, which is primarily built on Ethereum, and we believe we will see billions of trends in the coming months,” Hougan added.
