A few players dominate the Ethereum cryptocurrency ETF market globally, according to a report from CoinGecko.
Ten Ethereum ETFs hold 96.4% of Assets. A report from data firm CoinGecko relays that there are 27 Ethereum exchange-traded funds (ETFs) worldwide, with a combined total of $5.7 billion (USD) in total assets. However, it highlights that only ten control nearly all of the capital. “The ten largest Ethereum ETFs account for a disproportionate amount of $5.49 billion or 96.4% of assets,” warns the CoinGecko report, authored by cryptocurrency trader Lim Yu Qian.
In the image below, you can see what these 10 ETFs are. The first two are ether (ETH) futures, the Ethereum cryptocurrency, while the rest are spot, which means they invest directly in that currency.
“This suggests that a few players dominate the Ethereum ETF market despite more products and providers entering the market,” he argues. As the flags in the image indicate, people trade these instruments in Europe and Canada. This situation differs from bitcoin (BTC) ETFs, which the principals trade in the United States.
In the United States, there are no spot ETH ETFs, but only ETH futures, which were allowed last year. Meanwhile, the country’s Securities and Exchange Commission (SEC) is evaluating whether to approve spot ones. The SEC approved in January the launch of spot bitcoin ETFs, an event that has prompted expectations of an approval of ether ones. The agency has until May to give a verdict on these instruments.
Brazil is the second-largest Ethereum ETF market
Currently, the 27 Ethereum ETFs in the world are in 13 countries. Europe has three futures and ten spots, with a combined asset size of $4.65 billion, representing 81.45% of the market. Meanwhile, Canada has six spots with $949.25 million in assets, equivalent to 16.64% of the market.
Brazil ranks as the third largest Ethereum ETF market, with two spots cornering $47.3 billion in assets (0.83% of the market), followed by the United States with three futures holding $43.04 million in assets (0.75% of the market). Lastly, Hong Kong holds 0.21% of the market share, Australia 0.10%, and Malaysia (0.01%).
Futures: Uncertainty and Contracts in the Financial World
Imagine shaking hands with someone today, agreeing to buy a gallon of milk next week for, say, $2. That’s a futures contract in a nutshell! In the financial world, futures are agreements to buy or sell an asset – like a stock, commodity, or currency – at a set price on a specific future date. Think of it as a financial crystal ball, locking in today’s price for tomorrow’s delivery. But unlike our milk deal, futures are serious business, traded on specialized exchanges like the Chicago Mercantile Exchange. They’re used for two main reasons:
1. Speculation: Investors can bet on future price movements. Think oil prices are going up? Buy a futures contract, and if you’re right, you pocket the difference when it comes time to buy. But be warned, it’s a gamble – if the price falls, you could lose your shirt (or, more accurately, your investment).
2. Hedging: Businesses use futures to protect themselves from price swings. An airline, worried about rising fuel costs, might buy oil futures to lock in a predictable price for future flights. This way, even if oil prices skyrocket, their fuel costs are stable.
So, futures are like financial insurance or educated guesses, depending on how you use them. They can be lucrative, but they also carry significant risks. Remember, the future is rarely set in stone, and even the best crystal ball can get cloudy!