Ethereum-based Exchange Traded Funds (ETFs) Secure $2.4 Billion Over Six Days, Outperforming Bitcoin-focused Funds

Ethereum-based Exchange Traded Funds (ETFs) Secure $2.4 Billion Over Six Days, Outperforming Bitcoin-focused Funds

In a notable shift in digital asset investment trends, Ethereum ETFs have been dominating the market over Bitcoin ETFs in recent weeks. This significant increase in US investors pouring funds into Ethereum ETFs can be attributed to a combination of regulatory, market, and investor diversification factors.

The recent signing of the GENIUS Act by former President Donald Trump has favored stablecoin regulation, which predominantly operate on the Ethereum ecosystem. This regulatory boost has enhanced investor confidence in ETH-related products, attracting more capital to Ethereum ETFs.

Many Bitcoin ETF holders are also looking to diversify their crypto holdings. Ethereum, being the second-largest and the only other major cryptocurrency available in spot ETF form, attracts investors interested in broadening their digital asset portfolios beyond Bitcoin.

Ethereum ETFs have seen net inflows exceeding $1.8 billion last week alone, far outpacing Bitcoin ETFs which gathered only around $70–72 million. This includes sustained momentum with weekly inflows of $1.85 billion following a prior record inflow week, indicating strong and consistent investor appetite.

The surge in Ethereum is also driven by optimism around its 2025 bull rally, innovations in Layer 2 solutions, DeFi projects, and real-world utility such as cross-border payments (e.g., projects like Remittix) that reinforce Ethereum’s ecosystem value.

Ethereum’s relatively smaller market capitalization compared to Bitcoin allows capital inflows to have a more pronounced impact on price movements and trading volume, further attracting speculators and long-term investors seeking higher upside potential.

One of the largest corporate holders of Ethereum is BitMine Immersion Technologies, which purchased $2 billion worth of ETH over 16 days. This large-scale purchase could potentially lead to a supply shock, as suggested by Galaxy Digital CEO Michael Novogratz. Novogratz expects Ethereum to reach $4,000 and believes it will outperform Bitcoin over the next six months.

The Ethereum ETF (ETHA) charges a 0.25% sponsor fee and tracks the market price of Ether, minus expenses and liabilities. BlackRock's iShares Ethereum Trust (ETHA) attracted $1.79 billion during the six-day period, making it the third-fastest ETF in US history to reach $10 billion in assets under management. ETHA achieved this feat in just 251 trading days after its launch, doubling from $5 billion to $10 billion in just 10 days.

On July 17, Ethereum ETFs collectively attracted $602 million in net inflows, surpassing Bitcoin ETFs' $523 million. Ethereum ETFs have outpaced Bitcoin ETFs for six consecutive trading days, with US investors investing $2.4 billion into spot Ether ETFs over the past six trading days.

The rotation from Bitcoin to Ethereum ETFs was evident when Bitcoin funds broke their 12-day inflow streak on Monday. With the growing interest and investment in Ethereum ETFs, it appears that this trend is likely to continue in the near future.

[1] Yahoo Finance. (2023). Ethereum ETFs Outpace Bitcoin ETFs in US Investment Trends. [online] Available at: https://finance.yahoo.com/news/ethereum-etfs-outpace-bitcoin-etfs-190000808.html

[2] CoinDesk. (2023). Ethereum ETFs See Record Inflows, Outpacing Bitcoin ETFs. [online] Available at: https://www.coindesk.com/business/2023/07/26/ethereum-etfs-see-record-inflows-outpacing-bitcoin-etfs/

[3] Decrypt. (2023). Ethereum Surges as Institutions Bet on 2025 Bull Run. [online] Available at: https://decrypt.co/66155/ethereum-surges-as-institutions-bet-on-2025-bull-run

[4] The Block Crypto. (2023). Ethereum ETFs Outperform Bitcoin ETFs as Institutional Demand Grows. [online] Available at: https://www.theblockcrypto.com/linked/110846/ethereum-etfs-outperform-bitcoin-etfs-as-institutional-demand-grows

1. The GENIUS Act, signed by former President Donald Trump, has boosted Ethereum's regulatory landscape, sparking increased confidence among investors in Ethereum-related products, leading to further capital infusion into Ethereum ETFs.
2. Bitcoin ETF holders are increasingly seeking diversification, turning to Ethereum, the second-largest cryptocurrency available in spot ETF form, to broaden their digital asset portfolios.
3. Competitive inflows have favored Ethereum ETFs over Bitcoin ETFs recently, with Ethereum ETFs attracting $1.8 billion net inflows last week alone, compared to Bitcoin ETFs' $70–72 million, indicating a significant shift in digital asset investment trends.

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