Ethereum exchange-traded funds (ETFs) experienced a significant surge in popularity, recording approximately $4 billion in net inflows for August. This marks the second-largest monthly total since their launch, highlighting a notable shift in investor sentiment compared to Bitcoin ETFs.
Ethereum ETFs Outperform Bitcoin Counterparts
The ongoing strength of Ethereum ETFs has been evident since mid-July, coinciding with a price rally that enabled the cryptocurrency to recover from early-year losses and achieve a 13.8% gain by last Friday. Since July 17, Ethereum ETFs have consistently outperformed Bitcoin products, surpassing them in every trading day except seven.
Net inflows since mid-July reached $7.1 billion for Ethereum ETFs, significantly overshadowing the $505 million attracted by Bitcoin ETFs in the same timeframe. In July, Bitcoin ETFs led with inflows of $6 billion, while Ethereum funds amassed a record $5.4 billion.
However, August painted a different picture, as Bitcoin ETFs faced net outflows of $622.5 million, while Ethereum ETFs approached the $4 billion mark with one trading day left in the month. Over the past two months, Ethereum ETFs have drawn in $9.5 billion, compared to just $5.4 billion for Bitcoin.
Despite this recent momentum, Bitcoin ETFs retain a substantial lead in total lifetime inflows, securing $54.6 billion since their inception, as opposed to $13.7 billion for Ethereum. It’s crucial to note that Bitcoin ETFs launched six months earlier, giving them an initial competitive edge.
Break in Daily Inflows
Ethereum’s streak of daily inflows ended on Thursday after a successful run of seven consecutive days. Bitcoin ETFs racked up $178.9 million in inflows that day, led by ARK Invest’s ARKB with $79.8 million. The iShares Bitcoin Trust (IBIT) from BlackRock, the leading Bitcoin ETF by flows, added $63.7 million.
Conversely, Ethereum ETFs collectively attracted $39.1 million, with BlackRock’s ETHA emerging as the frontrunner at $67.6 million—the best daily performance among Ethereum funds. While Bitcoin ETFs continue to generate higher trading volumes, Ethereum products are quickly narrowing the gap.
On Thursday, Bitcoin ETFs recorded $2.5 billion in trading activity compared to $2 billion for Ethereum ETFs, reflecting growing market interest in the latter.
Market Dynamics and Outlook
Despite strong inflows, Bitcoin’s price remains close to $111,000, according to Timothy Misir, head of research at BRN, in a report from The Block. He noted that while ETF demand continues to absorb more than double the daily Bitcoin issuance, a lack of stronger conviction in the spot market keeps price actions relatively muted.
For Ethereum, short-term market pressures are under scrutiny, with Misir indicating that a drop in ETH below the support level of $4,500 could signify potential weakness, even amid robust ETF inflows. The contrasting inflows indicate a shifting dynamic in the cryptocurrency ETF landscape.
Investors appear increasingly willing to allocate funds to Ethereum as it gains traction in trading activity and capital flows, although Bitcoin still dominates in total assets under management and trading liquidity.
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