BlackRock's Ethereum ETF Hits $1 Billion in Net Gains, Nearly Tripling Fidelity

BlackRock’s spot Ethereum ETF crossed $1 billion in cumulative net inflows on Tuesday, cementing the Wall Street behemoth’s crypto offering as investors’ early go-to pick.

The iShares Ethereum Trust ETF (ETHA) debuted in late July alongside products from seven other asset managers. But when it comes to the ensuing footrace for investors’ cash, the competition has failed to keep pace while increasingly falling behind.

Fidelity’s Ethereum Fund is the current runner-up to ETHA, with $367 in cumulative net inflows. That’s followed by $310 million for the Bitwise Ethereum ETF and $227 million for the Grayscale Ethereum Mini Trust.

When combined, the three products account for around $900 million in allocations, still collectively coming short of ETHA’s individual progress.

BlackRock’s spot Ethereum ETF hasn’t seen any outflows since its debut, despite rockiness in the crypto market. When Ethereum’s price plummeted 22% on August 5, investors shoved $47 million into BlackRock’s product—and a further $100 million the next day.

At times, the disparity in flows between ETHA and its competitors has been stark. On the product’s best day, when it pulled in $118 million on July 30, Fidelity’s Ethereum Fund saw just $8.6 million worth of inflows, per data from Farside Investors.

Still, ETHA hasn’t proved as popular as BlackRock’s spot Bitcoin ETF, which launched back in January alongside competing funds. That product surpassed $1 billion in cumulative net inflows within the span of five trading days, while it took ETHA 21 days to cross that threshold.

Meanwhile, spot Ethereum ETFs have bled $440 million as a whole. Those outflows have been led by Grayscale’s Ethereum Trust, which has seen $2.4 billion in cumulative net outflows since it was upgraded from a closed-end fund.

Analysts have pointed to a high expense ratio for Grayscale’s product, as the asset manager charges a management fee of 2.5% to investors. At the same time, ETHA’s expense ratio of 0.25% matches Fidelity's Ethereum Fund, while five other cheaper spot Ethereum ETFs exist—such as the Franklin Ethereum ETF, with a cost basis of 0.19%.

ETHA’s early success isn’t limited to comparisons centered around the second-largest cryptocurrency. Last week, the fund’s inflows helped BlackRock to dethrone Grayscale in terms of total crypto assets under management (AUM). Grayscale had previously served as the largest asset manager in crypto for years.

Edited by Andrew Hayward