Record Inflows into US Ethereum ETFs Indicate Resurgence in Investor Interest

The
U.S.
Ethereum
(ETH)
spot
exchange-traded
funds
(ETFs)
experienced
record
daily
inflows
this
past
Friday,
signaling
an
increasing
interest
in
the
second-largest
cryptocurrency.
This
follows
a
period
of
underperformance
by
Ethereum
compared
to
Bitcoin
(BTC)
this
year.

Data
from
Farside
Investors
indicates
that
nine
combined
products
brought
in
$332.9
million
in
net
inflows
during
Friday’s
abbreviated
trading
session.
Leading
the
charge
were
BlackRock’s
iShares
Ethereum
Trust
(ETHA)
and
the
Fidelity
Ethereum
Fund
(FETH),
which
attracted
$250
million
and
$79
million
in
fresh
funds,
respectively.

This
marked
the
fifth
session
in
a
row
with
net
inflows
for
the
group,
capping
off
the
second
strongest
week
with
$455
million
in
net
inflows,
according
to
data
from
SoSoValue.
This
was
despite
the
shorter
week
due
to
U.S.
traditional
markets
being
closed
for
Thanksgiving.

Interestingly,
Ether
ETFs
also
outpaced
their
spot
Bitcoin
counterparts,
which
only
garnered
$320
million
inflows
on
Friday
and
experienced
net
outflows
throughout
the
week.

Ethereum
had
previously
fallen
out
of
favor
with
investors,
trailing
behind
Bitcoin
in
terms
of
price
action
and
ETF
flows.
However,
the
recent
election
victory
by
Donald
Trump
has
breathed
new
life
into
altcoins
and
decentralized
finance
(DeFi)
applications,
sparking
a
resurgence
in
interest
towards
Ethereum.

Further
bolstering
this
renewed
sentiment
is
the
record
surge
in
open
interest
for
ETF
futures
on
the
institutional-focused
Chicago
Mercantile
Exchange
(CME),
reaching
nearly
$3
billion,
as
reported
by
CoinGlass.

Crypto
trader
Edward
Morra,
observing
the
strong
ETF
inflows,
declared
Ethereum
as
“the
most
obvious
catch-up
trade
of
this
cycle,”
in
a
recent
post.

While
Bitcoin
spent
the
week
hovering
below
the
$100,000
mark,
Ethereum
demonstrated
relative
strength
against
the
leading
cryptocurrency.
Ethereum’s
price
reached
a
five-month
high
of
over
$3,700
on
Saturday,
outperforming
Bitcoin
on
both
a
weekly
and
monthly
basis,
although
it’s
still
trailing
on
a
year-on-year
basis,
according
to
CoinDesk
Indices
data.

Joel
Kruger,
market
strategist
at
LMAX
Group,
posits
that
the
ETH-BTC
ratio
might
be
forming
a
major
bottom
after
a
three-year
downtrend.
He
said,
“We
believe
the
improved
outlook
for
the
DeFi
space
—
warmer
regulatory
climate
with
the
incoming
US
administration
—
is
a
main
driver
behind
the
shift
in
sentiment,
as
market
participants
can
now
see
a
clearer
path
towards
investment
in
Ethereum.”