Ethereum Funds Reach $2.2 Billion in Annual Inflows, Surpassing Previous Record
Ethereum-based investment products reached $2.2 billion in annual inflows, driven by renewed interest and a rise in U.S.-based exchange-traded funds (ETFs). CoinShares' weekly report indicated that global Ethereum-focused funds managed by firms like BlackRock, Fidelity, and Grayscale attracted $634 million last week.
This surge has already exceeded the previous $2 billion annual inflow record set in 2021, with December still remaining. The increase in Ethereum's value is primarily attributed to U.S. spot Ethereum ETFs, which accounted for $466.5 million of inflows last week.
Ethereum ETFs Outpace Bitcoin Inflows
James Butterfill, Head of Research at CoinShares, noted this as a significant turnaround for Ethereum. Analysts from Bernstein highlighted Ethereum's favorable risk-reward dynamics and the potential approval of staking yields for Ethereum products by U.S. regulators. Despite initial setbacks, U.S. spot Ethereum ETFs netted $583.8 million, bringing total assets under management to $11 billion. Ethereum ETFs surpassed Bitcoin ETFs, recording $332.9 million in inflows compared to Bitcoin’s $320 million.
This marks the first time Ethereum has outperformed Bitcoin at such levels. BRN analyst Valentin Fournier linked this trend to increased investor confidence in Ethereum.
“Ethereum’s performance reflects renewed investor interest, with a 47.15% monthly gain, nearing its ETF announcement peak of $4,095,” Fournier stated.
Altcoins and XRP Lead Market Surge
The overall crypto market capitalization surged 72% since the U.S. elections, reaching $3.43 trillion. While Ethereum and Bitcoin remain significant players, altcoins are gaining traction, indicating a potential "alt-season," according to Fournier.
XRP funds saw record inflows of $95 million amid a 69% price increase, reclaiming its status as the third-largest cryptocurrency by market cap. Butterfill attributed this growth to excitement surrounding a possible U.S. spot XRP ETF.
Bitcoin faced challenges near the $100,000 resistance level, experiencing a 7% price drop before recovering to $97,000. Global outflows from Bitcoin funds reached $457 million, with U.S. spot Bitcoin ETFs contributing $135.1 million. Fournier observed changes in market sentiment, stating,
“Bitcoin dominance has dropped by 5% over the past 12 days, breaking below the positive trendline established in June 2023.”
Digital asset investment products reported an eighth consecutive week of net inflows totaling $270 million globally, with the U.S. contributing $266 million. Year-to-date inflows for digital asset funds have reached $37.3 billion, reflecting strong interest in the sector.