The cryptocurrency market has taken another step forward, with Ethereum spot ETFs being well-received on their first day of listing.

On Tuesday, July 23rd, local time, Ethereum spot ETFs began public trading in the United States. On their debut day, investors showed great enthusiasm, and media estimates suggest that the combined trading volume of the first nine Ethereum ETFs exceeded $1 billion.

The media noted that compared to the $4.6 billion in transaction volume on the first day of Bitcoin spot ETF listing in January this year, the trading volume of Ethereum ETFs is modest. However, for an ETF making its debut in the U.S. market, this is already considered a strong start. Several Ethereum ETFs are expected to rank among the top 50 U.S. ETFs in terms of trading volume on their first day of listing this Tuesday.

Analysts believe that the launch of this ETF is a positive development for the cryptocurrency market, which will help to increase market stability and reduce volatility.

Spot Ethereum ETFs are popular

Specifically, the trading volume of Grayscale Ethereum Trust, under Grayscale, was the highest, approaching $458 million, accounting for nearly half of the total trading volume.

BlackRock's iShares Ethereum Trust had a trading volume of $243 million, which is more likely to represent capital inflows compared to the trading volume of the Grayscale ETF.

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Fidelity Ethereum Trust, under Fidelity, also had a trading volume exceeding $100 million, while the fundraising for the remaining six funds was all below $100 million, with 21Shares' Ethereum ETF having the least fundraising appeal on its first day.

The total trading volume of these funds reached as high as $1.077 billion, accounting for about 20% of the trading volume on the day Bitcoin spot ETFs were launched in January.

It is worth mentioning that trading volume only represents the scale of transactions and does not reflect the capital inflow or outflow of investors. Data on the net inflow or outflow of Ethereum ETF funds may not be available until at least Wednesday of this week.Roundhill Financial's Vice President of Research and Operations, Drew Walsh, commented that the audience for Ethereum ETFs and Bitcoin ETFs is similar; they are not the native cryptocurrency audience but rather individuals who are newly exposed to this asset class and wish to hold exposure to cryptocurrencies.

Crypto ETFs Contribute to Market Stability

Some industry commentators are optimistic about the investment prospects brought by the listing of Ethereum ETFs to the Ethereum market.

Market analyst at investment company Conotoxia Ltd, Grzegorz Drozdz, stated:

Although Ethereum ETFs may not attract as much capital inflow as Bitcoin ETFs, they represent an important step in the development of the cryptocurrency market.

Ethereum, the second-largest cryptocurrency globally after Bitcoin, saw its price drop on Tuesday, pulling down the price of the new ETF. Currently, Ethereum is trading flat at $3,469.

Market participants believe that the launch of ETFs is significant for the industry's long-standing efforts to classify Ethereum as a commodity rather than a security. Although the U.S. Securities and Exchange Commission (SEC) has not explicitly stated that Ethereum is a commodity, the new product is defined as a commodity-based trust in the filing documents.

Moody's senior analyst for digital assets, Cristiano Ventricelli, wrote in a report on Tuesday:

The listing enhances the "legitimacy" of cryptocurrencies in the U.S. market, adding that crypto ETFs will help increase market stability and reduce volatility.

Additionally, analysis points out that in May of this year, when the U.S. SEC approved plans related to exchanges, it paved the way for the listing of Ethereum ETFs. Industry insiders expressed that the launch of Ethereum ETFs could lead to a surge in market demand, resulting in a tight supply of Ethereum. In the case of a tight supply, Ethereum's price may become more sensitive to capital inflows. The locked Ethereum cannot be used to meet the increased demand for ETFs, further causing supply tightness and driving up Ethereum prices. Therefore, the listing of Ethereum ETFs may herald a key "turning point" before a potential surge in cryptocurrency prices.Last month, Bitwise's Chief Technology Officer, Matt Hougan, predicted that an Ethereum spot ETF could attract net inflows of $15 billion within the first 18 months of listing. On Monday, media outlets reported that research institution Steno Research forecasted that an Ethereum spot ETF could attract between $15 billion and $20 billion in capital inflows within its first year, which is roughly the same amount that Bitcoin spot ETFs have seen in just seven months.

Wintermute statistics indicate that analysts currently expect the capital inflow for Ethereum ETFs within one year of listing to range between $4.8 billion and $6.4 billion. Wintermute's own analysts anticipate that the inflow will be below this expected range, with amounts between $3.2 billion and $4 billion.

Christopher Jensen, Head of Digital Asset Research at Franklin Templeton, stated that investors might adopt Ethereum ETFs more quickly than Bitcoin ETFs, as many have already had the opportunity to engage with Bitcoin ETFs. The total capital inflows for Ethereum spot ETFs could potentially reach around 30% of those for spot Bitcoin ETFs.