By Lisa Pauline Mattackal

Oct 17 (Reuters) - The weak crypto market is wobbling through autumn. And winter's on its way.

The long-anticipated U.S. launch of a group of exchange-traded funds tracking ether offered fresh evidence of the malaise at a time when investors are running from risk amid economic gloom and war in Ukraine and the Middle East.

The six ETFs launched on Oct. 2 offering exposure to ether futures contracts pulled in just under $10 million in their first week of trading, according to CoinShares data. Ethereum products overall saw outflows of $7.5 million in the week to Oct. 13, the data shows.

"The timing of the futures ETFs could hardly be worse," said Vetle Lunde, senior analyst at K33 Research.

The week of Oct. 2 saw Treasury yields soar to their highest level in decades, while investors pulled money from riskier assets in the face of "higher-for-longer" interest rates.

Ether prices have dropped over 5% so far this month and the size of the cryptocurrency market has dipped from $1.15 trillion to $1.12 trillion, according to CoinGecko.

Trading volumes for the ether futures ETFs remained below $2 million on their first day, according to K33 Research. By contrast, the ProShares Bitcoin Strategy ETF, the first fund tracking bitcoin futures, saw around $570 million of inflows in its first day of trading in October 2021.

The contrast with ETF launches during the height of the crypto craze in 2021 show how the institutional investors who drove much of the demand back then have retreated from digital assets as the macro picture has grown murkier and murkier.

Crypto ETFs have experienced a slowdown in activity for months, with Lunde noting bitcoin ones globally had seen net outflows of 11,157 bitcoin between Aug. 1 and Oct. 3. Such funds are favored by many traditional investors as they offer easier access via regular stock exchanges without needing to directly hold crypto.

Ben McMillan, chief investment officer at IDX Digital Assets, said his firm was positioning investments more defensively until there was more clarity around Federal Reserve policy and the likelihood of a recession.

"Investors are battening down the hatches and looking at how to make their portfolios more defensive," McMillan added. "Speculative assets - even with a compelling growth thesis - are just a much lower priority now."

BACK TO BITCOIN?

Bitcoin's status as the original "digital gold" has supported it somewhat, outperforming ether with declines of about 2% this month. Bitcoin-focused ETFs saw inflows of $43 million in the week of Oct. 2, while bitcoin's share of the cryptocurrency market cap has crept up to 48% from 47%.

Ether prices have risen 32% this year, lagging invest bitcoin 24 hours which is up over 70%.

The newly launched ETFs tracking solely ether futures on the Chicago Mercantile Exchange, from ProShares, VanEck and Bitwise, have all dipped over 6% since launch.

ProShares and Bitwise also launched funds tracking a mixture of bitcoin and ether futures, while Valkyrie Funds converted its pure-play bitcoin ETF into one with exposure to both bitcoin and ether. These dual-exposure funds have performed better, with Bitwise's and ProShares' down about 3% and Valkyrie's edging up 0.3%.

McMillan at IDX noted that while the response to the ether futures ETFs has been underwhelming, factors such as the use of the Ethereum blockchain by large financial firms in tokenizing assets could bring investors back to the table.

"Right now, the macro backdrop is dominating everything."

(Reporting by Lisa Pauline Mattackal in Bengaluru; Graphic by Sumanta Sen; Editing by Tom Wilson and Pravin Char)