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Ethereum exchange-traded funds (ETFs) have outpaced Bitcoin ETFs this week, attracting $1.8 billion in net inflows compared to Bitcoin’s modest $70 million.
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This shift highlights growing investor interest in Ethereum as a key diversification asset within the digital currency market.
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Ric Edelman, founder of the Digital Assets Council of Financial Professionals, noted to COINOTAG that Ethereum’s availability as a spot ETF makes it an attractive option for portfolio diversification.
Ethereum ETFs surged with $1.8B inflows this week, surpassing Bitcoin ETFs amid rising interest and the impact of new stablecoin legislation.
Ethereum ETFs Lead Crypto Fund Inflows Amid Growing Market Interest
In a notable development, Ethereum ETFs have significantly outperformed Bitcoin ETFs in net inflows over the past week. According to data from U.K.-based asset manager Farside Investors, the nine Ethereum-focused ETFs collectively attracted over $1.8 billion, continuing a 16-day streak of positive inflows. This contrasts sharply with Bitcoin ETFs, which added only $70 million during the same period, with several days showing net outflows. This trend underscores a shifting investor preference towards Ethereum, the second-largest cryptocurrency by market capitalization, as market participants seek to diversify their digital asset holdings beyond Bitcoin.
Factors Driving Ethereum’s ETF Popularity and Price Momentum
Several factors contribute to the growing appeal of Ethereum ETFs. The recent passage of the GENIUS Act stablecoin legislation, signed into law by U.S. President Donald Trump, is expected to benefit Ethereum due to its dominant role as the platform for stablecoin transactions. This regulatory clarity has bolstered investor confidence, coinciding with Ethereum’s price surge to approximately $3,745, marking a 50% increase over the past month despite a slight pullback from a seven-month high. BlackRock’s iShares Ethereum Trust (ETHA) led the inflows, adding $1.29 billion and reaching $10 billion in assets under management in just 251 days—the third-fastest in ETF history. Fidelity’s Ethereum Fund (FETH) also saw substantial growth, with over $380 million in net inflows and $2.3 billion in AUM.
Comparative Analysis: Ethereum ETFs Narrowing the Gap with Bitcoin ETFs
Juan Leon, senior investment strategist at Bitwise Asset Management, highlighted that Ethereum ETFs have been closing the inflow gap relative to Bitcoin ETFs over the past month. Despite Bitcoin’s market cap being approximately five times larger than Ethereum’s, the inflow ratio has narrowed significantly—from a 3.5x gap in early July to near parity last week. Leon anticipates that Ethereum ETFs will maintain this momentum in the short term, driven by increased investor interest and the expanding availability of Ethereum-based investment products.
Outlook for Bitcoin and Ethereum ETF Flows in the Coming Months
Looking ahead, Leon expects a resurgence in Bitcoin ETF inflows in the second half of the year as major wirehouse platforms such as Merrill Lynch and Wells Fargo begin offering Bitcoin ETFs to their clients. This institutional adoption is likely to “greenlight” Ethereum ETFs subsequently, potentially balancing the flow dynamics between the two assets. While Ethereum ETFs currently punch above their weight, Bitcoin’s entrenched market position and broader institutional support suggest that the current outperformance may be a temporary inflection point rather than a long-term trend.
Conclusion
The recent surge in Ethereum ETF inflows marks a significant moment in the evolving crypto investment landscape, reflecting increased investor appetite for diversification within digital assets. While Ethereum ETFs have outpaced Bitcoin ETFs this week, the broader market dynamics and upcoming institutional offerings indicate a competitive but balanced environment for both cryptocurrencies. Investors should monitor regulatory developments and platform expansions closely, as these factors will continue to shape ETF flows and market sentiment in the months ahead.
