ETH ETFs Begin Trading | Matt Hougan

Bankless Nation, the Ethereum ETFs are here. I was out yesterday. So, David, I feel like I need to get fully up to speed. And there's a bunch of people listening who need to get up to speed on this absolutely historic event. Ethereum has never had an ETF. Now it does. There was 1.1 billion in volume on the first day of trading. That was yesterday at the time of recording. 100 million, over 100 million in inflows. My question to you is that good? We gotta talk about this. And most importantly, when moon? When will all of this factor into price, David? It hasn't yet.

Well, last time we got an ETF, first everything went down because of grayscale, and then it went back up. And I think one of the big questions is is that going to be the same? Is that the same path that we're about to take? Or is it different because we've already taken that path and now the future is always different than the past? Uh we got Matt Hogan later in this episode to talk to you all about some of these questions and these answers. Uh before we get there, a message from our friends and sponsors over at

David, that is a great shill for an on-chain decks. Now the rest of this episode, we're not talking about decentralization. We're talking about ETFs, the Ethereum ETF.

for all

So

people who haven't made it on chain.

Yeah, look at I I got some ETH in a retirement account. So uh and there's people out there that like that and they want to buy more. That's allowed. Thank you, David. So let's talk about the launch. This was the tweet that I saw first uh to launch things. This is from Eric Balciounas.

It's official. The spot ETH ETFs have been made effective by the SEC. The day is finally here after being gaslit and uh plot twisted by the SEC for months. No, no, no, no, no. The Ether ETFs are here. James Sayford put out this meme of the classic horse race with the nine ether ETFs. ETH, ETH, E, EZ ET, ETH V, ETH W, C E ETH, F ETH, ETH A, Q ETH. All of the Ether spot ETFs that you can now get on the New York Stock Exchanges. We're also getting the website pages launches, because of course we were. Bitwise opens up their website to focus on their ether ETF. BlackRock.

It says meet ETH A, which is the BlackRock run. Uh BlackRock also drops this ETH ETF investor video. Oh. Uh which which is uh the first words. Remember when we had this big game of like how will how will TradFi pitch to their investors?

Hey, I do remember that. Don't you still owe me an ET uh uh NFT, David?

You know what? I'll meant it today, I promise.

Okay, so now we can finally get settled. We have some material, some glimpse as to how BlackRock and other TradFi people are selling Ether since we have this video. So let's watch let's watch for like the first like 45 seconds of this video just to kind of hear how they sell it to TradFi investors.

Here it is from BlackRock.

BlackRock.

Ethereum is the second largest cryptocurrency by market cap after Bitcoin and has key characteristics that make it distinct.

While many see Bitcoin's key appeal in its scarcity, many find Ethereum's appeal in its utility. Ethereum is a highly programmable blockchain that provides infrastructure for a diverse range of assets and use cases. You can think of Ethereum as a global platform for applications. This platform enables applications referred to as smart contracts to run without a centralized intermediary.

Transactions on Ethereum require a transaction fee to be paid in the network's native token, Ether. Investor interest in Ether has been expanding as more people adopt digital assets. And that's why we're introducing Ether, the iShare's Ethereum Trust ETF, which provides investors convenient exposure to Ether.

Then he gets into the mechanics of it. What do you think of that pitch from BlackRock?

Honestly, like who am I to judge BlackRock's uh Ether to their client base? Sure.

I think it left more to be desired. Okay. I think other people can do it better. Okay. Vanek, of course, also launching their marketing material as well. Vanek a little bit more crypto native. They're into the Ether campaign. They are ETH V. But then Bitwise, who we have Matt on the show today, Matt Hogan. We're about to get into that conversation with him. Bitwise launches ETHW, the Bitwise ETF, with some standout properties about their ETH ETF. 22.2% management fees. So on the lower side of the fees, that's 20 bips for you all you bippers out there. But 10% of this 0.2% management fee goes to Ethereum Open Source Development. That is Protocol Guild and the Proposer Builder Separation Association as well, which is a new open source advocacy group. And Bitwise had like an outsized showing with their Ether ETF today. Not only are they donating to Protocol Guild, but also they have all of their addresses under Bitwise.eth. So they have five relevant Ethereum addresses that are that are associated with their Ethereum ETFs. And it is one.bitwise.eth, two.bitwise.eth, three.bitwise.eth. They are using their ENS subdomains to label.

They're ETH ETF addresses, which I think is really cool.

Oh, they're dot ETHs, aren't they?

They are dot ETHs. That's right.

Yeah, even Vitalik was uh excited about this. He always appreciates donations to public goods. He said, I really support this that he's talking about the protocol guild donations from Bitwise. Uh look forward to seeing more projects and organizations follow your lead and donate to this important ecosystem wide public goods initiative. David, so uh let's get to Matt Hogan, because I think there's more analysis to do with respect to day one volumes, uh inflows, the the letter grade for like how the Ethereum ETFs are performing. Is this

What did we do?

Yeah, A B

Are we excited about nothing or are we excited about a very big day?

and look most importantly I want to hear when moon when is price gonna go up? So let's bring in Matt right now.

Bankless Nation, we got Matt Hogan here, Chief Investment Officer over at Bitwise. Matt, how'd yesterday go? Better than expectations, met expectations. Uh first impressions as to the ETF launch day.

I would say better than expectations. You know, these these new ETH ETFs traded over a billion dollars.

We had positive inflows despite significant outflows from ETHE. We saw over $200 million of inflows here at Bitwise.

There's a chance that these things, you know, came into the market, no big response. That's what we saw with ETH futures.

That's not the world we're living in. We learned yesterday that people want ETH exposure in an ETF.

It was a great day.

Matt, so I I saw over a a a billion in trading volume, which uh a billion in inflows. Uh is it inflows or trading volume? Sorry, I'm I was out yesterday, I'm still catching up. Inflows would have been phenomenal.

He said it's not an A plus, but a solid A for the first day. What what would you let her grade the first day for the Ethereum ETF?

I mean, that's a harsh grade. You know, let me put on my ETF hat.

You think an A is a harsh grade?

Well, let me explain why.

It's the best you can get. There's A plus. There's A plus.

We live in an era of great inflation. You know, we're talking A pluses here.

Um, let me put on my ETF hat and then I'll put on my crypto hat because it depends which perspective you're looking at.

So just a level set for the non ETF experts, the average ETF trades about a million dollars in its first day.

We got over a billion.

Yeah, this is a thousandfold better, right? That is that's pretty phenomenal. I think it's the second biggest debut of any ETF in history. There have been 5,500 ETFs that have launched, covering stocks, bonds, countries, sectors, et cetera. No,

ETH was the second best of all time.

That sounds pretty good. It's only from the lens of the Bitcoin ETF, which was absolutely historic, first in its class, $4.6 billion in volume,

that it's, you know, maybe only an A. But this was this was a great debut. It says a lot of good things about where this is going long.

I feel that that's always Ethereum's case. It's always like the middle child syndrome. It's always like the the big the little brother trying to catch up to big brother, and maybe that's just like destiny for a very long time.

It it it seems to be the case. That is right. And graded on a curve, adjusted for its market cap. It's right in line. It was a great, it was a great first day.

What would have been like if you you had said like this met expectations, it didn't blow anyone away, it didn't disappoint, it was just par for the course. What kind of trading volume number might that be in the range of?

Yeah, $400, $500 million. I think

Okay, and we're we're over double that. We're over double expectations.

we're over double expectations. And also, I can't stress how important this is.

Even for someone inside the industry, there was a chance you get to the starting line and it just fizzles.

Hmm.

There's $50 million, there's $100 million in trading volume. You don't know for sure.

And so we completely removed that negative case,

and we ended up on a very good case. You know, we did 86% of the inflows that Bitcoin ETFs did on day one on a net basis.

That's way bigger than