The crypto market fell across the board this week as the momentum of recent weeks faded. A major reason for the disappointment was a relatively weak launch of Ethereum (ETH 0.89%) ETFs in the U.S. According to Cointelegraph, Ethereum ETFs had $113 million of outflows on just the second day of trading, the opposite of the momentum we saw with Bitcoin (BTC 1.74%) ETFs. And that's put a damper on some of the optimism for other tokens.

According to data provided by S&P Global Market Intelligence, Ethereum fell as much as 12.1% over the past week, Lido Staked Ether (STETH 0.80%) was off 12.3%, and Cardano (ADA 2.15%) fell 13.1%. The tokens are currently down 8.4%, 8.3%, and 6.5% respectively as of noon ET on Friday.

Ethereum's ETF flop

There are now eight Ethereum ETFs trading, including the Grayscale Trust, which was converted to an ETF. The Grayscale Ethereum Trust had $811 million of outflows in its first two days of trading and offset the $784.3 million of inflows to seven other ETFs over that time.

One of the big reasons cryptocurrencies have had a strong run in 2024 was the introduction of Bitcoin ETFs early in the year and speculation that this would lead to more ETFs for other tokens. Ethereum is the first to get ETFs, but the door was cracked for other tokens like NEAR and Cardano.

If there's no demand for Ethereum ETFs, I'm not sure what demand there will be for even smaller tokens. And that's why altcoins are down along with Ethereum and its staked offspring.

Cardano's hack attempt

Another big news item was an attempted attack on the Cardano blockchain involving a user using a DDoS attack aimed to disrupt the network. A developer stopped the attack and may have also exploited funds from the attacker.

Attacks aren't new on the blockchain, but it's notable that such a weakness was available to be exploited.

Altcoins face questions

None of the week's news was a game changer for the blockchain itself, but it does bring up uncertainty as to how much demand there is for tokens beyond Bitcoin, which has solidified itself as the most valuable cryptocurrency.

Altcoins and utility blockchains clearly have some value, but the value of the tokens themselves doesn't appear to be as high as something like Bitcoin, which was a big part of the bullish thesis this year.

I think the industry is going to have to go back to building real products and adding value to the blockchain through utility and not rely on ETFs for demand. It's possible the Ethereum ETF will turn around, but there may not be much of an ETF market outside of Bitcoin.

I still think altcoins tied to blockchains with high user and developer activity will do well, but that will be a long-term play for investors. For this week, the focus is on retail demand from crypto ETFs, and there doesn't seem to be much demand there.