Ether Surge: $393M Inflows as Investors Bet on Pectra Upgrade

Crypto investors have turned their attention to Ether (ETH) this month, with U.S.-listed spot ETFs recording a net inflow of $393 million, according to Farside Investors. This figure is seven times larger than the inflows seen in January, indicating a significant shift in investor sentiment. In contrast, Bitcoin (BTC) ETFs have faced a net outflow of $376 million this month.

The pivot to ETH is driven by carry trading, which involves purchasing spot ETFs and shorting ETH CME futures simultaneously. Additionally, some of the inflows into ETFs could be outright bullish directional plays. However, investors' pivot to ether has not yet translated into higher prices for cryptocurrency. ETH has primarily traded between $2,600 and $2,800 since the Feb. 3 crash, while Bitcoin has been locked in a narrow range below $100,000 amid volatile price action in memecoins.

Some observers expect ether price gains on the back of Ethereum's impending Pectra upgrade, which is said to optimize both the execution and consensus layers of Ethereum and help it compete against rival Layer 1s such as Solana. Nick Forster, founder of the decentralized options platform Derive.xyz, believes that ETH has a solid foundation for a resurgence. The Pectra upgrade, scheduled for April 8, is bringing network improvements, faster transactions, and better staking mechanics. Forster also noted that Ethereum founder Vitalik Buterin's push for a 10x increase in the L1 gas limit points to improved application development and security. Furthermore, the ETH Foundation's recent $120 million allocation to DeFi projects signals a renewed focus on adoption and institutional interest through ETHrealize.

Forster added that there is now a 30% chance ETH will hit above $3K by the end of the quarter, up from 28% last week. Despite the positive outlook, investors should remain cautious and monitor the market closely as the crypto landscape continues to evolve.