Ethereum News Today: Ethereum ETFs see $1.85B surge 25x Bitcoin inflows boost 12% basis trade rate

Ethereum-based ETFs experienced a significant surge in net inflows of $1.85 billion during the week of July 21–25, outpacing Bitcoin ETFs by a factor of 25, which recorded $72 million in net inflows [1]. This disparity marked a notable shift in investor sentiment, with Ethereum ETFs now holding over $20 billion in total assets. BlackRock’s ETHA ETF, the largest in the complex, crossed the $10 billion threshold, accounting for half of the total inflows [1]. The momentum has pushed the CME Ethereum basis trade to an annualized rate of nearly 12%, up from 8% the previous week, while Bitcoin’s basis trade stood at 9.4% [2].

The inflows appear driven largely by hedge funds engaging in basis trading strategies. These involve purchasing spot Ethereum ETFs and shorting the asset on CME Futures, capitalizing on the price spread. Open interest in CME Ethereum futures surged to nearly 2 million coins, compared to just 150,000 for Bitcoin [2]. This strategy’s appeal is underscored by the higher yields available in the Ethereum market, with staking rewards at 3% and basis trade returns at 12%, alongside potential 2x returns from ETH treasuries [3].

Despite the massive inflow divergence, the ETH/BTC ratio—a key indicator of capital rotation between the two cryptocurrencies—remained relatively stable this week. Unlike the 28% rally observed in the previous week, which signaled a shift from Bitcoin to Ethereum, the current week showed muted movement. This suggests that while institutional capital is reallocating via ETFs and basis trades, the broader market may not yet be signaling a clear preference for Ethereum over Bitcoin [1]. Analysts note that the lack of a significant ETH/BTC ratio shift also aligns with the cooling of altcoin markets, as the ratio often acts as a barometer for broader crypto sentiment [1].

Spot demand for Ethereum, however, appears to be driven by other factors. Treasury firms are increasingly unstaking ETH from validators to reallocate capital toward opportunities such as stablecoin and tokenization booms. Ark Invest’s Cathie Wood highlighted that this trend is fueled by the potential for 2x returns on ETH treasuries, framing it as a strategic reallocation rather than a loss of confidence in Ethereum’s ecosystem [3]. Coinbase analysts echoed this view, emphasizing that the unstaking activity reflects shifting yield opportunities rather than bearish sentiment [3].

At the time of reporting, Ethereum traded at $3,700, with some optimism that it could test the $4,000 level if positive sentiment persists. The confluence of ETF inflows, basis trade activity, and treasury-driven demand has created a dynamic environment for Ethereum, though its long-term trajectory will depend on broader market conditions and regulatory developments.

Source:

[1] [Ethereum ETFs see $1.85B inflows – 25x more than Bitcoin!](https://ambcrypto.com/ethereum-etfs-see-1-85b-inflows-25x-more-than-bitcoin/)

[2] [Ethereum ETFs see $1.85B inflows – 25x more than Bitcoin!](https://ambcrypto.com/ethereum-etfs-see-1-85b-inflows-25x-more-than-bitcoin/)

[3] [Ethereum ETFs see $1.85B inflows – 25x more than Bitcoin!](https://ambcrypto.com/ethereum-etfs-see-1-85b-inflows-25x-more-than-bitcoin/)