Kategorie: Ethereum News

Ethereum news about the ETH blockchain and its crypto ecosystem.

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VanEck to close its Ethereum futures ETF in September, a year after launch

  • VanEck is closing its Ethereum Futures ETF (EFUT) by September 16, 2024.
  • The EFUT saw low asset accumulation as compared to VanEck’s spot Ethereum ETF.
  • Generally, Ethereum is facing challenges from competition and reduced network revenue and fees.

VanEck is set to close its Ethereum Strategy ETF (EFUT) by September 16, 2024, with liquidation expected by September 23.

EFUT, launched in October 2023, has struggled with low asset accumulation and performance compared to VanEck’s more successful spot Ethereum ETF (ETHV).

Strategic realignment

VanEck’s move to close the EFUT ETF comes as part of a strategic review of its ETF offerings. Launched in October 2023, EFUT was designed to provide exposure to Ethereum futures, but it amassed only $21 million in assets, contrasting sharply with the $63 million net inflows seen by the spot Ethereum ETF (ETHV).

The decision to liquidate EFUT aligns with VanEck’s ongoing assessment of factors such as performance, liquidity, and investor interest.

Shareholders of EFUT will receive cash distributions based on the net asset value of their holdings following the ETF’s closure and liquidation.

This shift reflects VanEck’s broader strategy of focusing on more successful crypto-related products.

Challenges facing Ethereum and Ether Futures ETF

VanEck’s August 2024 Crypto Monthly Recap highlights several challenges contributing to the recent Ethereum price struggles.

According to VanEck’s report, Ethereum’s share of decentralized exchange trading volume has dropped significantly from 42% in 2022 to 29% in 2024.

The report attributes this decline to several factors, including a general decrease in network revenue, deliberate policy decisions, and competition from higher-throughput blockchains such as Solana, Sui, and Aptos. These competitors are drawing speculative demand away from Ethereum, exacerbating its price issues.

Additionally, Ethereum’s layer-1 revenues have been impacted by competing layer-2 networks, which have led to a 99% drop in network fees since the Dencun upgrade in March 2024. This has intensified the competition within Ethereum’s ecosystem and driven the proliferation of layer-2 solutions, with some critics suggesting that the current number of Ethereum scaling solutions exceeds the necessary demand.

VanEck’s decision to close EFUT while continuing to offer other crypto-related products, such as the Digital Assets Mining ETF (DAM) and Bitcoin Strategy ETF (XBTF), underscores the firm’s ongoing engagement with digital assets despite the challenges facing Ethereum.

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Switzerland’s 4th largest bank ZKB launches Bitcoin and Ethereum trading

  • Zürcher Kantonalbank (ZKB) now offers Bitcoin and Ethereum trading via ZKB eBanking and Mobile Banking.
  • The bank has partnered with Crypto Finance AG and will use Fireblocks for secure custody.
  • The services are available only to Swiss residents with the necessary agreements signed.

Zurich Cantonal Bank, Switzerland’s fourth-largest bank locally known as Zürcher Kantonalbank (ZKB), has taken a major step into the cryptocurrency realm with the launch of Bitcoin (BTC) and Ethereum (ETH) trading services.

Announced on September 4, this development marks a significant milestone in the mainstream adoption of digital currencies by traditional financial institutions.

ZKB has partnered with Crypto Finance AG and Fireblocks

ZKB’s new offering allows retail clients to trade and store Bitcoin (BTC) and Ether (ETH) directly through its digital platforms: ZKB eBanking and ZKB Mobile Banking. This integration provides a seamless experience for customers, who can now manage their cryptocurrency holdings alongside their traditional investments without needing separate wallets.

To ensure a secure and regulated environment for these transactions, ZKB has partnered with Crypto Finance AG, a subsidiary of Deutsche Börse Group.

Crypto Finance AG’s technology, licensed by both FINMA and BaFin, will support the ZKB’s trading operations, ensuring compliance and security.

ZKB has also developed its own crypto custody solution, with Fireblocks playing a key role in safeguarding digital assets.

This strategic moves positions ZKB at the forefront of the cryptocurrency revolution, providing a centralized platform for trading and storage that eliminates the need for clients to manage their own private keys.

According to Alexandra Scriba, ZKB’s head of institutional clients, the bank’s approach offers high levels of security and the potential for integrating other digital currencies and applications in the future.

Currently, the crypto trading services are only available to clients residing in Switzerland and to activate an account, clients must sign agreements for trading, securities, and a “Consent Declaration Disclosure.”

This cautious approach reflects ZKB’s commitment to maintaining robust security standards while expanding access to digital currencies.

ZKB’s entry into the cryptocurrency market underscores a broader trend within the banking sector, where institutions are increasingly embracing digital assets. Competitors like PostFinance are also exploring crypto services, highlighting a growing acceptance of digital currencies in traditional finance, paving the way for more integrated and accessible cryptocurrency solutions.

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Bitcoin ETFs outperform Ether ETFs as BlackRock’s IBIT leads peers

  • Bitcoin ETFs have attracted $5B net inflows while Ether ETFs have seen $500M net outflows.
  • BlackRock’s IBIT leads with over $224M in a single day, currently holding over 350,000 BTC.
  • Ether ETFs are struggling due to liquidity issues and Grayscale’s $2.5B outflows.

Recent trends in the cryptocurrency exchange-traded funds (ETF) market have highlighted a significant divergence in the performance of Bitcoin and Ether ETFs.

Comparing Bitcoin ETF Flow data to Ethereum ETF Flow data on Farside Investors, Ether spot ETFs have underwhelmed compared to their Bitcoin counterparts. Since their launch, Ether ETFs have experienced net outflows of approximately $500 million, a stark contrast to the $5 billion net inflows recorded by BTC ETFs during a similar period following their debut.

Several factors contribute to this disparity. To start with, Bitcoin’s “first mover advantage,” higher liquidity, and lack of staking opportunities in Ether ETFs have made Bitcoin more appealing to institutional investors.

Additionally, unexpected outflows from Grayscale’s Ethereum Trust (ETHE), amounting to $2.5 billion, far exceeding the bank’s initial $1 billion estimate, have further dampened Ether ETF performance. To counter these outflows, Grayscale introduced a mini-Ether ETF, but it has only managed to attract $200 million in inflows.

In contrast, BTC ETFs have shown resilience and robust performance with US-based BTC ETFs recording an impressive eight-day winning streak, with net inflows totalling $202 million led by BlackRock’s iShares Bitcoin Trust (IBIT).

On August 26 alone, IBIT attracted over $224 million in net inflows bringing its total Bitcoin holdings to over 350,000 BTC, solidifying its dominance in the market.

Bitcoin ETF flows outperform Ether ETFs as BlackRock's IBIT leads peers
US Bitcoin ETF AUM, August January 18 – August 30, 2024|Source: Bitcoin ETF Fund Flows

Competing funds such as those managed by Franklin Templeton and WisdomTree also saw positive inflows, while others, including Fidelity, Bitwise, and VanEck, reported negative flows. Notably, Grayscale’s Bitcoin Trust (GBTC) saw a decline in redemptions over the past two weeks, indicating stabilization in the market.

As investor confidence in Bitcoin ETFs grows, asset managers are increasingly exploring combined ETFs that offer exposure to both Bitcoin and Ethereum, reflecting the evolving dynamics of the cryptocurrency investment landscape.

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Vitalik Buterin defends recent ETH sales, says they’re for projects and charity

  • Vitalik Buterin clarifies ETH sales were for projects and charity, not profit.
  • He held 325K ETH three years ago but now holds 240K ETH.
  • Buterin has also defended Ethereum’s support for DeFi amid criticisms from some in the space.

Ethereum co-founder Vitalik Buterin has come out to address allegations surrounding his sales of Ether (ETH), clarifying that these transactions were not driven by personal profit but by a commitment to support Web3 projects and charitable initiatives.

According to a recent post by on-chain analytics firm Lookonchain, Buterin has reduced his ETH holdings by 85K ETH ($209M) in 3 years.

The most recent is the transfer of 800 ETH worth over $2 million to a multi-sig wallet. Lookonchain highlighted that the same wallet address had received 3,000 ETH from Buterin on August 9, fueling concerns about the motives behind Buterin’s sales.

Vitalik Buterin denies selling ETH for profit

In response, Buterin firmly denied any allegations of selling ETH for personal profit. He clarified that he has not sold any Ether for personal financial gain since 2018. Instead, he explained that his ETH sales were intended to support various Web3 projects and philanthropic endeavours.

Buterin’s statement aims to underscore his longstanding commitment to using his resources for the advancement of important causes rather than personal enrichment.

Supporting Ethereum and DeFi

Buterin’s statements also touch upon his stance regarding decentralized finance (DeFi) and the broader Ethereum ecosystem. He has come under fire for Ethereum allegedly not sufficiently supporting DeFi.

Kain Warwick, the inventor behind the concept of yield farming, and MilliΞ a crypto philosopher criticized Buterin for his perceived lack of emphasis on DeFi.

However, Buterin defended Ethereum’s role in DeFi and his position stating that he thinks “DEXes are great, and I use them every week.”

Buterin’s defence reflects his commitment to ensuring that Ethereum continues to support meaningful and sustainable developments within the blockchain space. He has consistently advocated for the importance of long-term value over temporary gains, reinforcing his position that the Ethereum network should remain focused on foundational principles rather than transient trends.

By addressing these allegations and defending Ethereum’s role in DeFi, Buterin reaffirms his commitment to the broader vision of a decentralized and impactful digital future.

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BlackRock launches Ethereum ETF on B3 stock exchange in Brazil

  • BlackRock launches Ethereum ETF (ETHA39) in Brazil via BDR on B3 stock exchange.
  • Initial trading price set between R$40-R$50 with first-year fees halved to 0.12%.
  • Brazil now has 15 crypto-linked ETFs.

BlackRock has expanded its cryptocurrency product portfolio in Brazil by launching the iShares Ethereum Trust (ETHA) via a share receipt (BDR) on the B3 stock exchange.

This follows the successful introduction of BlackRock’s Bitcoin ETF (IBIT39) in the country, marking another significant step in making crypto assets more accessible to Brazilian investors.

Initial trading price to range between R$40 and R$50

The iShares Ethereum Trust, trading under the ticker ETHA39, is designed to cater to both retail and institutional investors.

The ETF’s initial trading price is expected to range between R$40 and R$50, representing approximately one-third of the value of the original asset that backs the BDR.

The management fee for the ETF is set at 0.25% per year, mirroring the fee structure in the United States. However, during the first year of trading or until the ETF reaches $2.5 billion in assets under management (AUM), the fee will be halved to 0.12%, making it even more attractive to investors.

Demand for crypto-related products in Brazil

Cristiano Castro, BlackRock’s director in Brazil, emphasized that the launch is a response to the growing demand for crypto-related products in the country. He highlighted the success of the iShares Bitcoin Trust as evidence of this demand, noting that it became the fastest-growing ETF in history over three months.

According to Castro, BlackRock’s strategy is to meet this demand by facilitating access to digital products within the capital market.

Before being launched in Brazil by BlackRock, the original iShares Ethereum Trust was launched in the United States in June 2024 and quickly became the most liquid cryptocurrency fund, with 80% of its trading volume coming from individual investors.

The Brazilian market, which has seen significant growth in crypto trading, now offers 15 ETFs or BDRs linked to digital assets. Despite the existence of multi-asset funds in Brazil, BlackRock’s reputation and established governance are expected to attract investors to ETHA39.

This launch underscores Brazil’s position as a key market for crypto investments, with nearly 180,000 investors holding crypto products valued at approximately R$5.5 billion.

As the demand for digital assets continues to rise, BlackRock’s Ethereum ETF is poised to play a crucial role in the evolving landscape of Brazil’s financial market.

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