Cathie Wood’s investment firm, Ark Invest, recently sold two Ethereum futures ETFs, including its own ARKZ ETF and ProShares’ EETH.
On August 9, Cathie Wood’s Ark Invest made significant moves in the crypto market by selling large portions of its Ethereum futures ETFs.
This action might suggest a bearish outlook for Ethereum exchange-traded products (ETPs) and indicates a broader shift in investor sentiment amid increasing outflows from spot Ethereum ETFs.
Ark Invest Sells Ethereum Futures ETFs
Ark Invest sold 400 units each of two Ethereum futures ETFs: the Ark Active Ethereum Futures Strategy ETF (ARKZ) and the ProShares Ethereum Strategy ETF (EETH).
The ARKZ sale was valued at $12,056, while the EETH transaction was worth $21,112.
Although these sales represent a relatively small divestment, they may reflect a strategic repositioning by Ark Invest, possibly signaling reduced confidence in Ethereum ETPs and its short-term outlook.
In contrast, recent activity by Cathie Wood’s firm regarding crypto stocks suggests a more optimistic stance.
On August 7, Ark Invest purchased 145,420 shares of Robinhood Markets Inc. (HOOD), investing $2.4 million as the market showed signs of recovery.
This acquisition occurred just before Robinhood’s earnings report, with the stock closing at $17.12 on the day of the transaction.
Additionally, Ark Invest bought 13,833 shares of Coinbase Global Inc. (COIN), signaling a positive outlook as the asset rose by 2% following a period of decline due to recession concerns.
Notably, the firm led by Cathie Wood had also bought HOOD and COIN stocks during the market downturn.
Overview of the Ethereum ETF Market
Amid Ark Invest’s Ethereum futures ETF sale, the broader Ethereum market has shown mixed signals in recent days.
On August 9, spot Ethereum ETF flows recorded a net outflow of $15.8 million. However, the weekly total remained positive at $104.8 million, indicating mixed sentiment.
On Friday, BlackRock’s Ethereum ETF saw inflows of $19.6 million, while Fidelity’s FETH had more modest inflows of $3.9 million.
Conversely, Grayscale’s ETHE faced significant outflows totaling $41.7 million.
Meanwhile, Ethereum’s price has been relatively stable, trading between $2,550 and $2,650.
Despite this stability, recent market behavior suggests a potential shift in sentiment.
QCP Capital’s analysis highlights a fundamental change in liquidity profiles between Bitcoin (BTC) and Ethereum.
Bitcoin vs. Ethereum
According to QCP’s latest Weekend Brief, BTC is becoming increasingly integrated into mainstream macro capital markets, while ETH is being sidelined.
This shift is partly due to the lack of interest in spot Ethereum ETFs compared to spot Bitcoin ETFs.
QCP Capital noted that BTC is seen as “digital gold,” a narrative that has attracted institutional investors.
However, ETH lacks a similarly compelling story.
This sentiment was evident on August 5, when ETH experienced a 22% drop in value, compared to a 16% decline in BTC.
This disparity highlights a broader trend where BTC is favored for its stability and mainstream acceptance, while ETH is viewed as a more speculative and volatile asset.
The report also noted that the difference in implied volatility between BTC and ETH has widened significantly. Before the ETH spot ETF launch, the volatility difference was around 5%.
It has now expanded to about 20%, suggesting that investors might be adjusting their strategies by selling BTC volatility and buying ETH volatility.
Despite these bearish signals, QCP Capital’s analysis suggests that ETH’s increased price volatility could present opportunities for substantial gains, but also carries the risk of larger drawdowns.
On the other hand, the strong and structural bullishness in BTC is reflected in the consistent demand for Bitcoin call options expiring in 2025 with strike prices near $100,000.
