The launch of spot Ether ETFs saw a swift sell-off, signaling potential trouble ahead for the cryptocurrency market, according to 10x Research.

Sell-Off Tendency Mirrors Previous Crypto ETF Launches

As soon as the much-anticipated spot Ether exchange-traded funds (ETFs) went live, the market's euphoria evaporated, and the price of Ether fell.

Recent research from 10x Research indicates that this sell-off tendency is very similar to what has happened with other crypto ETF launches, such as spot Bitcoin ETFs.

According to 10x Research's Markus Thielen, who spoke with Cointelegraph, many investors "anticipated Ethereum ETFs would capture 20% of Bitcoin ETF inflows."

“However, they overlooked potential billion-dollar outflows from Grayscale and the tendency for exchange listings to trigger ‘sell the news' reactions. Additionally, the crypto market is entering a seasonally weak period.”

The first Bitcoin dividends from Mt. Gox occurred at the same time as the approval and debut of spot Ether ETFs, adding fuel to the fire as selling pressure increased in the market.

The 10x article states that Grayscale's $9 billion Ethereum Trust lost a hefty amount of money - $481 million in the first day and $326 million in the second.

On the other hand, Bitwise and other ETF issuers got $204 million in first-day inflows, mostly from Pantera Capital, a venture capital firm.

Pantera Capital's Rapid Sell-Off Reflects Market Uncertainty

The research states that Pantera seems to lack faith in ongoing growth due to its apparent rapid sell-off of its "seed investment," which reflects a mixed attitude in the market.

The research paints a gloomy picture of Ether, suggesting that the cryptocurrency was overbought prior to the highly anticipated introduction of the ETF.

“Ethereum might be the weakest link, where fundamentals (new users, revenues, etc.) have been stagnant or lower.”

After a day of fluctuating prices due to market uncertainty, the price of ETH has stabilized at $3,181, a decline of about 8%.

Wall Street Struggles to Understand ETH Value Proposition

According to the 10x research, Wall Street traders have a hard time putting a finger on what makes ETH special, in contrast to Bitcoin's "digital gold" reputation.

“While tech investments are often risky, Wall Street people usually don’t place bets on things they don’t understand.”