The historical Spot Ethereum Exchange-Traded Funds (ETFs) are currently seeing a negative sentiment, which is believed to be mimicking the negative trend seen with that of the Spot Bitcoin ETFs on BTC’s price following its inception in January of this year. Their respective ETFs have seen decreased inflows and deteriorating performance, closely mirroring each other as the two most popular cryptocurrencies face downward pressure.

Spot Ethereum ETFs Face Notable Challenge

According to analysts at the Woo X research platform, spot Ethereum ETFs are in a similar downward trend to Bitcoin, indicating the general bearishness of the market. After the inception of the ETH spot ETFs on July 23, Woo X highlighted that the crypto asset saw an 11% reduction in price, falling from $3,500 to a low of about $3,100 simultaneously in just three days.

In addition to the present unfavorable market conditions, the analysts at the firm state that the ETH spot ETFs are confronting an obstacle akin to the one that BTC had previously faced, citing the selling pressure from the largest asset management company, Grayscale.

The platform noted that post the launch of the Bitcoin spot ETFs, BTC also experienced a 20% price drop, falling from about $48,000 to $38,000 in over two weeks due to the selling pressure from Grayscale’s BTC ETF, GBTC. 

However, the price later surged from the $38,000 price level to a historic high of $73,000 as Grayscale’s GBTC selling pressure reduced, and the net capital flowing into the funds continued to rise.

In the event that Ethereum witnesses a similar circumstance, Woo X believes the price of ETH could hit the $2,850 mark. Meanwhile, the precise effect will be determined by the selling pressure exerted by Grayscale and the net inflows of the spot ETH ETFs generally.

ETH Spot ETFs Attract Negative Inflows

Investors’ interest around the spot Ethereum ETFs seems to have dived down as the funds after Tuesday’s trading recorded a negative outflow, with millions of dollars seen flowing out from the products.

According to data from the London-based investment management company Farside Investors, the products saw an overall outflow of $47 million. Fidelity ETH ETF (FETH) was the only fund that closed the market on a positive note, attracting about $4.9 million daily inflows. 

Other asset management firms funds like Blackrock‘s Ethereum ETF (ETHA), Bitwise ETH ETF (ETHW), 21Shares ETH ETF (CETH), VanEck ETH ETF (ETHV), and Franklin ETH ETF (EZET) closed the market on a negative note with zero inflows. Meanwhile, Grayscale ETH ETF (ETHE) saw another day of outflows reaching about $52.3 million.

This outflow suggests that investors are withdrawing from the products due to the recent price movement of ETH and the general market fluctuations, reflecting a cautious approach as they reassess their exposure to the altcoin.

Featured image from Unsplash, chart from Tradingview.com

Meme coin aficionados won’t want to miss SXSW 2023 in Austin, Texas, which is set to feature an exclusive exhibit of SHIB The Metaverse, a Shiba Inu-themed metaverse project, according to a recent announcement. 

The project will give attendees a first-hand preview of WAGMI Temple — the first of 11 hubs in its metaverse.

At WAGMI Temple, visitors can explore a virtual representation of Shiba Token’s collective history with immersive experiences and learn more about its decentralized roots.

Aside from this, users will also gain access to new digital services as well as social experiences such as virtual reality gaming within the metaverse.

“What makes SHIB: The Metaverse stand out is the unique possibilities that are offered in each HUB,” said Sherri Cuono, one of SHIB The Metaverse Advisors. 

SHIB The Metaverse is a decentralized environment powered by the Shiba Inu community. It allows users to own and monetize digital real estate as well as provide new online social interactions and group experiences such as virtual reality and gaming.

The metaverse project was introduced last year to much fanfare. It has added more utility to the controversial meme coin, which exploded in popularity in late 2021.   

Bitcoin futures premiums have been consistently trending in the low for some time now. There have been instances where they have broken out of this trend of low performance, but they seem to fall right back in. This does not spell all bad news for the futures premiums as it hints at exhaustion coming. This is attributed to the premiums trading close to yearly lows indicating that it is nearly a point of exhaustion across the board.

Bitcoin Futures Premiums Down

The reason behind the bitcoin futures premiums being down can be attributed to sell-offs that have rocked the digital asset in recent times. Not only have the sell-offs been apparent in investors who are directly exposed to the cryptocurrency but those who have exposure through traditional markets vehicles like ETFs have been selling off too. The most prominent of these have been the high outflows recorded from the ProShares BITO ETF, which is said to be one of the major drivers behind the low basis.

BTC futures premium down | Source: Arcane Research

Across crypto exchanges FTX and Binance, the bitcoin three-month basis has been trending around 25 to 3%, one of the lowest ever recorded. The last time the basis had touched this low had been in February when bitcoin’s price had been struggling. The value of the digital asset had promptly recovered following a short squeeze that fueled a $6,000 recovery for the cryptocurrency, seeing it touch a peak of $44,000.

Related Reading | Top Ethereum Whales Now Hold Almost $1.5 Billion Worth Of SHIB

However, after this has come more low momentum on the futures premium basis front. It is now trading even lower than it did in February, lagging behind its offshore venue peers at a premium of 1.34%. This is seen as a direct indicator of how investors are feeling toward the digital asset. Since Bitcoin had lost its footing above $40,000, sentiment has turned generally bearish and this has translated to muted futures premiums at rarely seen low levels.

BTC trading north of $41,000 | Source: BTCUSD on TradingView.com

A light at the end of the tunnel looks to be coming up though given the history of performance that has followed low futures premiums such as this. They are historically known to be short-lived, usually followed by a surge in the price of the digital asset, as was recorded in late February.

Related Reading | Could Netflix Tumble Down The Crypto Market?

If this is the case and bitcoin follows historical patterns, then another $6,000 rally would put the digital asset at the $47,000 mark. And if sell-off exhaustion does kick in, sentiment could quickly turn back into the positive, leading to more surge in the price of the cryptocurrency.

Featured image from MARCA, chart from TradingView.com