It seems that institutional investors are flocking to Ethereum (ETH-USD) over Bitcoin (BTC-USD) as the crypto markets recover from a recent slump. According to a CoinShares report published on August 12, Ethereum exchange-traded products (ETPs) saw a whopping $155 million in inflows for the week ending August 11. That’s a staggering 88% of the total $176 million that poured into crypto investment products during that period.
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Ethereum Takes the Lead
What’s driving this Ethereum-centric enthusiasm? CoinShares suggests that the recent launch of U.S. spot-based Ethereum ETFs has played a significant role. With year-to-date inflows now totaling $862 million, Ethereum is enjoying its highest inflows since 2021. To put it into perspective, Bitcoin ETPs only managed to scrape together $13 million in inflows for the same week, with outflows of $366 million month-to-date. That’s a tough break for Bitcoin, which seems to be taking a back seat as Ethereum rides high.
The Grayscale Ethereum Trust (ETHE) also had a noteworthy moment recently, posting its first day of zero outflows since converting to a spot ETF, according to Farside Investor’s data. Given that ETHE had been hemorrhaging funds—losing nearly $2.3 billion in Ether since its launch—this is a significant development. In comparison, Grayscale’s Bitcoin Trust (GBTC) took nearly four months to achieve a similar milestone. It seems Ethereum is getting its groove back, especially as on-chain activity surges across Ethereum and its layer-2 networks.
Activity Heats Up on Ethereum Networks
Speaking of on-chain activity, Ethereum is humming with life. According to CoinTelegraph, trading volumes on Ethereum-based decentralized exchanges (DEXs) rose by 12% recently, while layer-2 networks like Base and Arbitrum (ARB-USD) are seeing record numbers of active users. With Ethereum’s layer-2 networks posting a cumulative 298 transactions per second on August 12, it’s clear that the Ethereum ecosystem is anything but sluggish.
What Does This Mean for Ethereum’s Future?
Analysts are keeping a close eye on these dwindling outflows from Ethereum ETFs, seeing them as a potential bullish catalyst for the cryptocurrency. If history is any guide, ETH’s price could follow a similar trajectory to Bitcoin after its spot ETF approvals, which also started with heavy outflows but eventually paved the way for a price surge.
Comparing ETFs on TipRanks
Investors can use TipRanks’ Bitcoin ETF Comparison tool to help guide their investing decisions.
