Ethereum News Today: Ethereum ETFs Outpace Bitcoin by 25x as 12% Basis Trade Drives $1.85B Inflows

Ethereum ETFs have attracted $1.85 billion in weekly net inflows, outpacing Bitcoin ETFs by a factor of 25, according to COINOTAG analysis. This marks a historic shift in institutional capital toward Ethereum, with the CME ETH basis trade expanding to nearly 12% annualized returns—a stark contrast to Bitcoin’s 9.4%—as hedge funds exploit the price spread between spot and futures markets [1]. BlackRock’s ETHA ETF now holds over $10 billion in assets, representing half of all Ethereum ETF holdings, underscoring its dominance in the surge [2].

The strategy driving these inflows involves buying spot ETH ETFs while shorting ETH futures on the CME, a tactic that has drawn significant institutional participation. Velo and COINOTAG data highlight that this basis trade offers yields up to 12% annually, compared to Ethereum’s staking returns of 3%, attracting treasury firms and capital allocators seeking higher returns [3]. Despite record inflows, the ETH/BTC ratio has remained largely flat this week, indicating that while Ethereum is capturing institutional interest, broader market rotation between the two cryptocurrencies has not accelerated [4]. Analysts suggest this stability reflects short-term arbitrage opportunities rather than a structural reallocation of capital [5].

Spot demand for Ethereum is also evolving, with treasury firms increasingly prioritizing ETH as a yield asset. COINOTAG and Ark Invest’s Cathie Wood note that unstaking activity is driven by these entities, which are reallocating capital to basis trades offering 12% returns. Coinbase analysts concur, framing this trend as a response to shifting yield dynamics rather than a loss of confidence in Ethereum [6]. At $3,700, Ethereum’s price has yet to fully reflect the influx of institutional capital, but sustained inflows and rising spot demand could support a test of the $4,000 level, provided market sentiment remains positive.

The divergence in ETF performance between Ethereum and Bitcoin highlights Ethereum’s unique appeal to institutional investors. Ethereum ETFs now hold $20 billion in total assets, far exceeding Bitcoin ETFs’ $72 million in net weekly inflows. This disparity signals growing confidence in Ethereum’s ecosystem, particularly as treasury firms and hedge funds capitalize on arbitrage opportunities. However, the ETH/BTC ratio’s stagnation suggests that altcoin markets remain subdued, with capital flows concentrated in Ethereum rather than broadly distributed across the cryptocurrency sector.

Market participants are closely monitoring whether this momentum translates into a sustained price increase. While the $4,000 threshold remains a key psychological level, analysts caution that broader macroeconomic factors and regulatory developments could influence Ethereum’s trajectory. For now, the interplay between spot demand, derivatives trading, and institutional positioning appears to be the primary driver of Ethereum’s market performance.

Sources:

[1] [Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth] [https://en.coinotag.com/ethereum-etf-inflows-surge-past-bitcoin-as-hedge-funds-drive-basis-trade-and-spot-demand-may-support-further-growth/]

[2] [Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth] [https://en.coinotag.com/ethereum-etf-inflows-surge-past-bitcoin-as-hedge-funds-drive-basis-trade-and-spot-demand-may-support-further-growth/]

[3] [Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth] [https://en.coinotag.com/ethereum-etf-inflows-surge-past-bitcoin-as-hedge-funds-drive-basis-trade-and-spot-demand-may-support-further-growth/]

[4] [Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth] [https://en.coinotag.com/ethereum-etf-inflows-surge-past-bitcoin-as-hedge-funds-drive-basis-trade-and-spot-demand-may-support-further-growth/]

[5] [Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth] [https://en.coinotag.com/ethereum-etf-inflows-surge-past-bitcoin-as-hedge-funds-drive-basis-trade-and-spot-demand-may-support-further-growth/]

[6] [Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth] [https://en.coinotag.com/ethereum-etf-inflows-surge-past-bitcoin-as-hedge-funds-drive-basis-trade-and-spot-demand-may-support-further-growth/]