Ethereum Out of Favor with Institutions, Records $108M in Sales

  • CoinShares analysis shows that institutional investors have fallen out of favor with Ethereum (ETH).
  • Analysts from the analytics platform have labeled the latest altcoin by market cap as the “least loved digital asset” for exchange-traded product (ETP) investors.

A report by the leading European alternative asset manager specializing in digital assets CoinShares shows that institutional investors have fallen out of favor with Ethereum (ETH). Analysis shows that institutional investors have sold upwards of $108 million worth of ETH in 2023.

In just the last week, the second-largest cryptocurrency by market cap recorded $4.8 million in outflows. Head of research for CoinShares, James Butterfill, revealed that this is by far the most sold cryptocurrency in 2023. Labeling it the “least loved digital asset” for exchange-traded product (ETP) investors, the digital asset has pulled a big margin between it and second place holder, Tron, amounting to more than $50 million.

The lack of interest from institutions speaks to a broader bearish outlook. The broader market has been struggling for the last two years, and with institutional investors generally concerned about the volatility that plagues the market, they have shunned away from it.

The lack of investment from institutional investors has been evident in ETH prices. The altcoin has struggled for the last couple of months, failing to break out of the $1,500 to $1,800 price range. Exchanging for $1,550, the digital asset has lost more than 67 percent of its value after reaching $4,878 almost two years ago.

Can an Ethereum ETF Welcome Investors Back?

Although Ethereum is currently struggling to attract institutional investors, this could dramatically change with the launch of an Ethereum ETF. Earlier this year, Volatility Shares and other top financial giants filed for Ethereum futures ETFs with the SEC. Market experts expect the SEC to greenlight the Ethereum futures ETFs in mid-October.

Bitcoin enjoyed a 60 percent surge after the approval of a Bitcoin futures ETF in 2021. Investors are optimistic that the upcoming Ethereum approval will lead to a similar rally.

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Read More: Will an Ethereum ETF be Approved Ahead of a Bitcoin ETF? Insider Gives Shares Insight

Furthermore, Cathie Wood’s ARK Invest has filed for a spot Ether spot ETF. This comes in spite of the U.S. Securities and Exchange Commission (SEC) having failed to approve the many filed spot Bitcoin ETFs. It is predicted that the approval of a Bitcoin spot ETF will drive institutional investment.

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Bloomberg’s Senior ETF Analyst, Eric Balchunas, projects that BlackRock’s Spot Bitcoin ETF could potentially unleash a monumental $30 trillion from financial advisors into the crypto market. An Ether spot ETF could also bring similar investment and drive ETH investment.

Related: Ethereum ETF on the Horizon: ARK Invest and 21Shares Forge Crypto Future

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