Ethereum ETFs See 6-Week Inflow Surge Amid Regulatory Shifts

Ethereum ETFs have experienced a significant surge in inflows, marking six consecutive weeks of increased interest. This trend follows a period of relative stagnation since their launch in July 2024, during which these funds were largely overlooked. The consistent inflow of cash into Ethereum ETFs over the past eight out of nine weeks indicates a renewed appetite for these investment vehicles.

This resurgence in interest coincides with regulatory actions in the US and advancements in stablecoin technology, which predominantly operates on the Ethereum network. The IPO of Circle, the company behind the second-largest stablecoin, and a leadership change at the Ethereum Foundation have also contributed to this renewed institutional interest. Institutions are quietly re-entering the market, driven by arbitrage opportunities and strategic positioning ahead of potential utility unlocks such as staking access and options listings.

According to Ben Kurland, CEO of research firm DYOR, institutional investors are recalibrating their strategies. After the initial approval of Ethereum ETFs failed to generate significant price momentum, smart money has been quietly building positions. These investors are betting on positioning ahead of utility unlocks and eventual inflows from retirement platforms. Ethereum ETF inflows have reached around $3.9 billion, a figure that, while small compared to Bitcoin ETFs, which pulled in $36 billion in their first year, is indicative of growing interest.

Chris Rhine, who heads liquid active strategies at Galaxy Digital, attributes this growing interest to the increasing acceptance of crypto on Wall Street, particularly as a means for payments and remittances. The arbitrage window, where the CME basis on Ethereum is wider than Bitcoin’s, is also a driving force. This gap allows traders to go long on Ethereum ETFs and short on futures, squeezing out profits. This strategy is simple, repeatable, and is contributing to the steady ETF inflows observed recently.

Despite the inflow of money into ETFs, the price of Ethereum itself has remained relatively stable. Over the past month, it has been basically flat, and for the year, it has fallen 25%. This drop reflects Ethereum's struggle with its identity and revenue since its last major upgrade. Additionally, macroeconomic pressures and geopolitical noise have kept volatility high across the crypto market. In March, Standard Chartered cut its Ethereum price target by more than half, although the bank still sees a chance for recovery by the end of the year. The recent spike in ETF inflows has slowed but has not reversed.

While Ethereum is playing catch-up, Bitcoin continues to drive market momentum. After hitting an all-time high in May, Bitcoin fell 10% over the next nine days but has since almost fully recovered. This rebound is fueled by institutional interest, policy changes, and market structure. The IBIT ETF has already hit $70 billion in assets in just 341 days, more than five times faster than SPDR Gold ETF’s record. The weekly chart of Bitcoin futures has been climbing since late 2022, with key metrics indicating a potential breakout. The Average Percent True Range (APTR) is currently at 8.5%, a low reading that typically precedes a price surge. On the daily chart, APTR is hovering between 3% and 4%, another low reading that suggests Bitcoin is testing the $110,000 resistance level for the third time. Some traders are calling for a breakout, with a Fibonacci target set at $135,000.

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