Ethereum News Today: Ethereum ETFs Surge Past Bitcoin with $1.8B Inflows Post-GENIUS Act Approval

Spot Ethereum ETFs have surged ahead of their Bitcoin counterparts, attracting over $1.8 billion in net inflows this week compared to just $70 million for Bitcoin funds. The nine ETH-tracked products extended a 16-day winning streak, reflecting a shift in investor appetite for the second-largest cryptocurrency. This outperformance follows the passage of the GENIUS Act stablecoin bill, which President Donald Trump signed into law, bolstering Ethereum’s role as the dominant platform for stablecoin transactions. Meanwhile, Ethereum treasury companies and growing ETF accessibility have amplified demand, with analysts noting the funds’ appeal for portfolio diversification [1].

The momentum was driven by strong performance from leading ETFs. BlackRock’s iShares Ethereum Trust (ETHA) dominated with $1.29 billion in inflows, becoming the third-fastest fund in the ETF industry’s 32-year history to reach $10 billion in assets under management (AUM) in 251 days. Fidelity’s Ethereum Fund (FETH) added $380 million, bringing its total AUM to $2.3 billion. These figures highlight Ethereum’s ability to attract capital despite its smaller market cap relative to Bitcoin [1].

Ric Edelman, founder of the Digital Assets Council of Financial Professionals, attributed the shift to investor demand for diversification. “Ethereum is the only other spot ETF available besides Bitcoin, making it a natural choice for those looking to balance their portfolios,” he noted. The trend aligns with broader market dynamics: Ethereum’s price has risen over 50% in a month, trading near $3,745, after a prolonged period of underperformance against Bitcoin. However, Edelman cautioned against chasing gains, emphasizing the risks of buying high and selling low [1].

Ethereum’s ETF inflows have narrowed the gap with Bitcoin. In early July, the 5x disparity in market cap between the two assets translated to a 3.5x gap in ETF inflows. By the following week, the gap had shrunk further, and last week, the flows were nearly equal. Juan Leon of Bitwise Asset Management called this a “short-term inflection point,” noting that Ethereum’s performance relative to its size continues to “punch above its weight.” However, he expects Bitcoin ETFs to regain traction in the second half of 2024 as major platforms like Merrill Lynch and Wells Fargo expand their offerings to include Bitcoin before ETH ETFs [1].

The surge in Ethereum ETF adoption underscores the asset’s growing institutional legitimacy. Yet, challenges remain. Bitcoin’s historical dominance and broader retail appeal suggest the outperformance may be temporary. For now, the interplay of regulatory clarity, product innovation, and shifting investor preferences has positioned Ethereum as a key contender in the ETF landscape.

Source: [1] [Ethereum ETFs Massively Outpace Bitcoin Funds—Why ETH Demand Is Surging] [https://decrypt.co/331906/ethereum-etfs-massively-outpace-bitcoin-funds]