JPMorgan’s latest report reveals that ether exchange-traded funds (ETFs) have underperformed compared to their bitcoin counterparts since their debut last month. The bank noted that while bitcoin ETFs experienced robust growth earlier this year, ether ETFs have struggled to attract similar interest.
The ether ETFs began trading in the U.S. on July 23, about six months after bitcoin ETFs launched. Over the first five weeks of trading, ether ETFs faced approximately $500 million in net outflows, whereas bitcoin ETFs enjoyed net inflows exceeding $5 billion.
JPMorgan attributes the weaker performance of ether ETFs to bitcoin’s “first mover advantage,” the absence of staking opportunities for ether, and lower liquidity which has reduced their appeal to institutional investors. Additionally, the significant $2.5 billion outflow from Grayscale’s Ethereum Trust (ETHE)—more than the $1 billion the bank had anticipated—further highlights the challenges faced by ether ETFs.
In response to these outflows, Grayscale has introduced a new mini ether ETF, which has only garnered $200 million in inflows to date. The report suggests that asset managers are increasingly interested in filing for combined ETFs that offer exposure to both bitcoin and ether, reflecting the market’s evolving preferences.
The report also indicates that institutional and retail ownership of spot bitcoin ETFs has remained relatively stable, with retail investors holding approximately 80% of these funds. Most new spot bitcoin ETFs have been acquired by retail investors, either directly or through investment advisors.
