In a turbulent debut, spot ether (ETH) exchange-traded funds (ETFs) have encountered significant net outflows in their first week, primarily driven by substantial withdrawals from the established Grayscale Ethereum Trust (ETHE).

Contrary to expectations, these ether ETFs saw a net exodus of $340 million, with more than $1.5 billion pulled from the Grayscale Trust, as reported by Farside Investors. This contrasts sharply with the performance of similar bitcoin (BTC) funds, which attracted $1 billion in net inflows within their initial four days despite also facing notable outflows from an existing Grayscale bitcoin fund.

The lukewarm reception of ether ETFs has been mirrored in the price movements of ETH, which declined by 5% over the past week. In contrast, bitcoin managed a modest gain of 2%.

Read more: Mt. Gox Bitcoin Sell-Off Impacts Market; Ether ETFs Anticipated to Drive New Flows

Despite the overshadowing Grayscale withdrawals, newly listed ether ETF products from prominent financial institutions such as BlackRock, Bitwise, and Fidelity managed to draw in $1.15 billion in inflows last week. This suggests that investor interest in these products remains robust, albeit temporarily eclipsed by the Grayscale outflows.

Analysts predict that the rapid pace of outflows from ETHE, which currently indicates that the fund might deplete its assets within the next four weeks, could begin to decelerate as early as this week. Quinn Thompson, the founder of digital asset hedge fund Lekker Capital, observed that ETHE has already divested a similar volume of assets as Grayscale Bitcoin Trust (GBTC) did when bitcoin hit a local bottom in late January during its post-ETF sell-off. Notably, BTC fell 15% to below $39,000 over two weeks before embarking on a rally to new all-time highs.

This tumultuous start for ether ETFs underscores the volatile nature of digital asset markets and the pivotal role of investor sentiment and market dynamics in shaping fund performance.