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In summary
- Ethereum spot ETFs saw an increase in allocations, led by BlackRock’s iShares Ethereum Trust with $1.5 billion in recent flows.
- Fidelity saw record inflows into its Ethereum Fund, as the price of ETH surpassed $4,000 after months of moderate performance.
- Despite the success, Ethereum faces challenges from Layer 2 networks and has not surpassed its all-time high of $4,800 in 2021.
Five months after the debut of Ethereum ETFs, investor allocations to the products are accelerating, with BlackRock’s $3.6 billion offering leading the movement.
BlackRock’s Ethereum spot ETF—the iShares Ethereum Trust—closed a 16-day streak of net inflows with a $200 million increase on Thursday, attracting $1.5 billion since Nov. 20, according to CoinGlass. Before that, the ETF had recorded $1.7 billion in net inflows since its debut in July, spanning 84 trading days.
Bitcoin spot ETFs have been crowned a resounding success this year, attracting billions of dollars in inflows since their launch in January. Although the products have helped make Bitcoin a Wall Street darling, the industry’s second-largest coin by market cap hasn’t had the same run, while Ethereum spot ETFs saw a post-election boost,
Still, the iShares Ethereum Trust ETF (ETHA) recently saw record inflows, attracting $293 million as the price of Ethereum fell to $3,800 on December 5. The next day, Ethereum price surpassed $4,000, eclipsing the psychological mark for the first time since March.
The increase in flows for the iShares Ethereum ETF coincided with comments from Jay Jacobs, BlackRock’s US head of thematic and active ETFs. On Thursday, he said BlackRock is at the “tip of the iceberg” with its Bitcoin products. and Ethereum, focusing on those offerings rather than expanding its portfolio, according to Bloomberg ETF analyst Eric Balchunas.
While BlackRock’s Ethereum spot ETF is dominant in the US, similar products are seeing renewed attention around the world, James Butterfill, Head of Research at CoinShares, told Decrypt. Since Nov. 20, investors have submitted $3.5 billion in Ethereum investment products, he said.
“It’s not just a BlackRock or iShares thing,” Butterfill said. “We’re seeing a pretty unanimous shift in sentiment towards Ethereum, which has really been suffering.”
Notably, Fidelity’s Ethereum Fund (FETH) saw its best day of net inflows on Thursday as investors poured $200 million into the product, according to Coinglass.
In fact, the conversation around Ethereum has become embroiled in a debate over whether layer 2 networks, which are faster and cheaper than Ethereum’s base layer, are detracting from its underlying network. Meanwhile, the price of Ethereum has not surpassed its all-time high of $4,800 in 2021, as competitors like Solana have reached record prices.
“Ethereum is the underdog this year,” Butterfill said. “He’s catching up a little bit.”
Pointing to three consecutive weeks of Solana investment product releases, Butterfill said investor enthusiasm may have cooled. However, this year several asset managers such as Bitwise and 21Shares have filed applications for Solana spot ETFs in the US, a move that could eventually expand investor access to the currency similar to Bitcoin and Ethereum.
BRN analyst Valentin Fournier attributed the $273 million in inflows to Ethereum spot ETFs to the president-elect’s comments on Thursday. Ringing the opening bell at the New York Stock Exchange, Donald Trump said “We’re going to do something great with cryptocurrencies.”
Edited by Andrew Hayward
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