surpasses Bitcoin flows in a historic week

The ETF on Ethereum have seen net inflows of over 1.8 billion dollars this week, far surpassing the products on Bitcoin, which stopped at only 70 million dollars. The difference marks a historic turning point in the digital asset sector.

Why did Ethereum ETFs outperform Bitcoin this week?

From July 1 to 7, 2024, the nine ETFs directly linked to Ethereum experienced record inflows of 1.8 billion dollars according to Farside Investors. In comparison, the 12 ETFs on Bitcoin accounted for just 70 million, with as many as three days of net outflows.

Historically, Bitcoin was the only asset to dominate this segment. However, the situation has reversed, marking a clear change in investor interest. Ric Edelman, founder of the Digital Assets Council of Financial Professionals, explains: 

“Many holders of Bitcoin ETFs want to diversify. Ethereum is the second most important digital asset, and the only other one available in spot ETF format.”

What factors have changed the game for Ethereum?

The approval of the GENIUS Act, signed by Donald Trump last week, has given a decisive boost to Ethereum ETFs. This law favors the regulation of stablecoin, which today primarily transit on the Ethereum ecosystem.

Furthermore, there has been a growth in the companies that hold reserves in ETH, contributing to increasing the perceived value of Ethereum and its institutional demand.

These two elements have fueled the bull run in ETFs and strengthened the narrative of Ethereum as the reference crypto infrastructure for decentralized finance.

How much has the price of Ethereum grown recently?

During the week of the overtaking on Bitcoin ETFs, Ethereum settled around 3,745 dollars. This value represents an increase of over 50% in the last month—despite a 3% drop from the seven-month high reached at the beginning of the week.

The dynamic seems to confirm Edelman’s saying that “investors tend to buy assets after a bull run,” even if this approach is often counterproductive in the markets.

BlackRock leads the charge: ETHA shatters records

In the race for Ethereum ETFs, the BlackRock iShares Ethereum Trust (ETHA) has stood out: this week it gathered 1.29 billion dollars in new investments.

ETHA has reached 10 billion dollars of AUM (Asset Under Management) in just 251 days. This is the third fastest advancement in the history of ETFs.

Just consider that in the last 10 days alone, the assets of ETHA have doubled, going from 5 to 10 billion.

Not only BlackRock: Fidelity Ethereum Fund in strong growth

Immediately behind we find the Fidelity Ethereum Fund, which has accumulated over 380 million dollars, bringing its assets to approximately 2.3 billion.

These numbers indicate a growing confidence among both retailers and institutional investors towards Ethereum.

What do ETF managers say: is it a structural change?

According to Juan Leon, senior strategist at Bitwise Asset Management, the performance of Ethereum ETFs this week is just the tip of the iceberg of a month of overtaking Bitcoin.

“At the beginning of July, the market capitalization difference between Bitcoin and Ethereum was 5 to 1; that of ETF flows about 3.5 to 1. This week the gap has almost closed. An unprecedented dynamic.”

Leon states that this trend could continue for a few more weeks. However, he expects a renewed interest in Bitcoin in the second half of 2024, as soon as platforms like Merrill Lynch and Wells Fargo reopen trading on Bitcoin and also launch options on ETH.

“This will bring new flows towards Bitcoin. Even if Ethereum will not always surpass Bitcoin, it is now experiencing a moment of maximum weight in investors’ portfolios,”

conclude Leon.

What does it mean for the cryptocurrency market?

The wave of interest in Ethereum ETFs shows that regulated products on digital assets other than Bitcoin have finally gained credibility and critical mass, carving out a dominant role in institutional strategies.

The combination of legislative trend (approval of the GENIUS Act), the advance of large ETFs (BlackRock, Fidelity), and the race for corporate reserves of ETH has, in fact, temporarily reduced the absolute supremacy of Bitcoin in the sector.

For those who closely follow the evolution of DeFi, stablecoin, and new regulations, this shift offers new insights into how the financial map of cryptocurrencies is being redesigned.

What to expect in the coming weeks?

Ethereum seems destined to maintain significant attention in the coming weeks, supported by flows into ETFs, a clearer regulatory framework for stablecoins, and the growing presence in corporate reserves.

However, according to industry analysts, the return of appetite for Bitcoin through the main US investment platforms could rebalance the situation by the second half of the year.

The future depends on how the preferences of institutional investors will evolve, on the new ETF product offerings, and on regulatory reactions. Follow the community, stay updated on the performances, and keep an eye on the possible new records of flows in the coming months.