In the past two weeks, investors have withdrawn $120 million from investment products focused on ETH. The launch timeline of the Ether spot ETF has been delayed after the US Securities and Exchange Commission (SEC) requested the issuer to resubmit the revised S-1 draft.
On July 2nd, the trading price of Ethereum (ETH) was around $3,448, showing little change in the past few hours, but consistent with the overall optimism in July.
Meanwhile, Ethereum bulls are eyeing new highs above $3,450 and betting on the upward potential brought by the hype surrounding the Ethereum spot exchange-traded fund (ETF).
These new products are expected to launch in the US later this month and may help push ETH/USDT beyond the resistance level of $3,630, which was rejected on June 17th.
On July 1st, bullish speculators suffered slight losses as Ethereum failed to maintain momentum above $3,520.
ETH attempted to break out of a descending channel on the 4-hour timeframe during the night, but as of the time of writing, it failed to consolidate this trend.
It is worth noting that the recent gain of $3,500 is not considered a victory for bulls if Ethereum fails to break through the resistance zone of $3,520 to $3,550.
Ethereum Institutional Absorption
CoinShares observed in its digital asset flow report released on Monday that Ethereum investment products saw outflows of $60.7 million last week.
This figure marks the most significant 7-day negative flow in nearly two years, bringing the total outflows in the past two weeks to $119 million.
The report further emphasizes that in terms of net flows, Ethereum is the worst-performing crypto asset in 2024, with monthly and year-to-date flows of $37 million and $25 million, respectively.
US Ethereum Spot ETF
The US Ethereum spot ETF has been approaching its final stage this summer after the SEC approved the 19b-4 applications of eight potential issuers on May 23rd.
However, these ETF products are still pending approval for listing, awaiting the approval of the S-1 registration statement.
The latest setback in the approval process has been a rejection by the US securities regulator. Last week, the SEC reviewed the issuer’s S-1 form and requested a resubmission containing its comments by July 8th.
As a result, the launch time of the Ethereum spot exchange-traded fund has been delayed until mid or late July.
Market Expectations
Last week, Bernstein analysts Gautam Chhugani and Mahika Sapra predicted that the demand for the Ethereum spot ETF after its launch would be slightly lower compared to the Bitcoin (BTC) ETF, as their sources of demand are mostly the same.
The authors also pointed out that the approved spot Ethereum ETF’s “lack of ETH staking functionality” is a deterrent that may suppress people’s interest in these products.
Since its launch earlier this year, the Bitcoin ETF has attracted $55 billion in funds.
Although inflows have decreased from the peak in February, analysts predict that this number is expected to exceed $100 billion by the end of 2025.
On the other hand, JPMorgan predicts that net inflows into Ethereum exchange-traded funds could be around $3 billion by the end of this year (or $6 billion if staking is allowed).
JPMorgan also forecasts that the immediate market reaction will be slightly negative, as investors may take profit as they bought the Grayscale Ethereum Trust (ETHE) with the expectation of converting it into an ETF.
Additionally, last week, Matt Hougan, Chief Investment Officer of Bitwise, predicted that the Ethereum spot ETF would attract $15 billion in net inflows in the first few months.
