Ethereum is approximately one-third the size of Bitcoin, and the debut of its spot ETFs was slightly less than commensurate by size. However, ether has outperformed bitcoin when we look at the absolute value of its net flows on the day of its ETFs debut. Ether posted a positive $107 million versus bitcoin’s decidedly negative -$1.5 billion.

First-day trading volume of Blackrock’s spot ether ETF totaled approximately one-quarter the volume of first-day trading volume of Blackrock’s spot bitcoin ETF.

Combined, trading volume for all nine spot ether ETFs totaled $1.112 billion yesterday — slightly under one-quarter the volume of all spot bitcoin ETFs on their debut day.

At the close of after-hours trading on US markets, net flow data was unavailable for two spot ether ETFs: Blackrock (ETHA) and Invesco/Galaxy (QETH). Excluding those two funds with unavailable data, most reporters went to bed reporting that money probably flowed out of spot ether ETFs. Net flows ex-ETHA/QETH totaled -$165.3 million.

However, by midnight New York time, Blackrock and Invesco/Galaxy had updated their flow data. Impressively, Blackrock posted $267 million in net subscriptions, dragging the whole basket of ETFs into positive territory.

As of midnight, first-day spot ether ETF net inflows totaled $107 million. That significantly outperforms first-day spot bitcoin ETF net flows of -$1.5 billion.

Had it not been for Blackrock’s impressive first-day performance with its ETHA, more money would have left spot ether ETFs than entered those funds on day one. That net ex-Blackrock negative flow would have had a single explanation: Grayscale’s liquidity event.

Once-trapped ETHE investors breathe a sigh of relief

For seven years, most investors in Grayscale’s Ethereum Trust (ETHE) have not been able to redeem their shares for ether. Prior to yesterday, ETHE was not an ETF and had no daily liquidity or rebalancing obligations to align its share price with the actual value of ether.

Instead of tracking the price of ether, ETHE traded at various premiums or discounts to its net asset value (NAV). After initial years of irrational exuberance, ETHE has traded at a discount to its NAV since 2021. At its worst, on December 28, 2022, ETHE traded at a 60% NAV discount.

The same phenomenon occurred in Grayscale’s Bitcoin Trust (GBTC) which traded at a discount to NAV from February 2021 through its ETF conversion in January 2024.

Since November 2021, long-term ETHE investors have patiently waited for Grayscale to win its bid to convert the trust into an ETF. That wish came true yesterday. On cue, investors withdrew a stunning $484.1 million from ETHE — enjoying not only price parity with spot ether but also cheaper maintenance fees in any of eight competing spot ether ETFs.

New spot ether ETF cash inflows of $107 million is less than 0.1% of Ethereum’s $412 billion market capitalization. Net flows on the first day of spot bitcoin ETF trading were also worth less than 0.1% of bitcoin’s market capitalization.

Read more: If SEC approves ether ETF, will it approve altcoin ETFs?

Buy the rumor, sell the news

The debut of spot ether ETFs also had no same-day impact on ether’s price, which traded unchanged on the 24-hour trading session. As with most well-known market events, investors positioned themselves for today’s spot ether ETF debut far in advance.

On May 20, the price of ether rallied in the first major ETF news event. On that date, the SEC made surprisingly positive requests of spot ether ETF sponsors, indicating that commissioners were unlikely — as had previously been speculated — to flatly deny all ETF applications.

Due to that news, the price of ETH/BTC rallied from 0.046 to 0.055 just 24 hours later — a 20% outperformance of ether relative to bitcoin within one day.

On May 20, the price of ether rallied in the first major ETF news event.

Read more: All of Michael Saylor’s Ethereum predictions were wrong

In the weeks since that major move, ETH/BTC has traded around that post-rally range, indicating that most investors had already bid for ether weeks ago in anticipation of yesterday’s ETF debut.

In summary, ether outperformed bitcoin in its first day of spot ETF trading. Ethereum enjoyed $107 million of net inflows across all nine spot ether ETFs. Blackrock’s $266.5 million in net subscriptions led the pack in absorbing outflows from Grayscale. The second-best ETF by net inflows, Bitwise, subscribed $204 million.