Ethereum Faces Major Outflows Amid Security Concerns and ETF Anticipation
Ether Products See Largest Withdrawals Since 2022 Ethereum’s investment products are experiencing significant outflows, with professional investors pulling over $120 million from ether (ETH)-tracked exchange-traded products (ETPs) in the past two weeks, according to a recent CoinShares report. These withdrawals are the highest since August 2022, with $60 million in net outflows each week. In contrast, multi-asset and bitcoin (BTC) ETPs saw inflows of $18 million and $10 million, respectively, suggesting a shift in investor sentiment.
Ether ETFs on the Horizon The U.S. Securities and Exchange Commission (SEC) recently approved applications for Ether ETFs, which are expected to start trading soon. Firms like Galaxy and Bitwise predict substantial interest, with potential inflows of $5 billion in the first five months and $15 billion in the first 18 months, respectively. The demand is anticipated to come from independent investment advisers and broker/dealer platforms.
Security Concerns and Losses Ethereum’s blockchain has been the hardest hit by security issues in the first half of 2024. A report by blockchain security firm SlowMist revealed that Ethereum suffered approximately $400 million in security-related losses, making it the most affected chain. In comparison, Arbitrum and the Blast network lost $72 million and $70 million, respectively. Binance Smart Chain (BSC) recorded the highest number of incidents with 57, compared to Ethereum’s 46.