The U.S. Ethereum (ETH) spot exchange-traded funds (ETFs) experienced record daily inflows this past Friday, signaling an increasing interest in the second-largest cryptocurrency. This follows a period of underperformance by Ethereum compared to Bitcoin (BTC) this year.
Data from Farside Investors indicates that nine combined products brought in $332.9 million in net inflows during Friday’s abbreviated trading session. Leading the charge were BlackRock’s iShares Ethereum Trust (ETHA) and the Fidelity Ethereum Fund (FETH), which attracted $250 million and $79 million in fresh funds, respectively.
This marked the fifth session in a row with net inflows for the group, capping off the second strongest week with $455 million in net inflows, according to data from SoSoValue. This was despite the shorter week due to U.S. traditional markets being closed for Thanksgiving.
Interestingly, Ether ETFs also outpaced their spot Bitcoin counterparts, which only garnered $320 million inflows on Friday and experienced net outflows throughout the week.
Ethereum had previously fallen out of favor with investors, trailing behind Bitcoin in terms of price action and ETF flows. However, the recent election victory by Donald Trump has breathed new life into altcoins and decentralized finance (DeFi) applications, sparking a resurgence in interest towards Ethereum.
Further bolstering this renewed sentiment is the record surge in open interest for ETF futures on the institutional-focused Chicago Mercantile Exchange (CME), reaching nearly $3 billion, as reported by CoinGlass.
Crypto trader Edward Morra, observing the strong ETF inflows, declared Ethereum as “the most obvious catch-up trade of this cycle,” in a recent post.
While Bitcoin spent the week hovering below the $100,000 mark, Ethereum demonstrated relative strength against the leading cryptocurrency. Ethereum’s price reached a five-month high of over $3,700 on Saturday, outperforming Bitcoin on both a weekly and monthly basis, although it’s still trailing on a year-on-year basis, according to CoinDesk Indices data.
Joel Kruger, market strategist at LMAX Group, posits that the ETH-BTC ratio might be forming a major bottom after a three-year downtrend. He said, “We believe the improved outlook for the DeFi space — warmer regulatory climate with the incoming US administration — is a main driver behind the shift in sentiment, as market participants can now see a clearer path towards investment in Ethereum.”
