A recent report from CoinShares has indicated a significant uptick in inflows for Ethereum (ETH) over the past week, surpassing Solana’s (SOL) inflows for the year 2024. This surge in inflows coincides with the impending launch of exchange-traded funds (ETFs) that will allow regulated investment in the US for the second-largest cryptocurrency by market capitalization. Ethereum has shown strong momentum over the past month, with inflows totaling $45 million last week, bringing the year-to-date total to over $103 million. In comparison, Solana saw inflows of $9.6 million during the same period, resulting in a year-to-date total of $71 million, which lags behind Ethereum’s inflows.
Among other altcoins, Litecoin was the only one to receive inflows exceeding $1 million, with $2.2 million recorded last week. The report also indicates that general digital asset investment products saw continued buying, with inflows totaling $1.35 billion last week, contributing to a three-week inflow streak of $3.2 billion. This influx of funds has played a role in the recent recovery in crypto prices. Additionally, trading volumes of exchange-traded funds increased significantly by 45% week-on-week to $12.9 billion. However, these volumes represented only 22% of the broader crypto market volumes, indicating a relatively lower proportion.
While Ethereum saw a substantial increase in inflows, Bitcoin recorded $1.27 million in inflows last week. However, short-bitcoin ETPs observed outflows of $1.9 million, amounting to $44 million since March, representing 56% of the assets under management (AuM). The Securities and Exchange Commission (SEC) is expected to fully approve spot Ethereum ETFs soon, following the approval of Bitcoin ETFs earlier in the year. This approval could attract billions of dollars in retail and institutional investor cash, further impacting the crypto market.
Industry experts speculate that the approval of Ethereum ETFs by the SEC will have a significant impact on the Ethereum blockchain and its decentralized finance (DeFi) protocol. James Seyffart, a Bloomberg ETF expert, anticipates the ETFs to begin trading soon, which could lead to increased interest and adoption of Ethereum. Mark Connors, the head of global macro strategy at Onramp, referred to Ethereum as the “middle kid protocol,” emphasizing the crucial test that the ETF launch represents for the DeFi ecosystem. The success and participation in the ETF launch will shed light on Ethereum’s ability to maintain its market standing and attract sustained interest, potentially influencing its price in the future.
Ethereum’s recent surge in inflows and impending ETF launch signify a shift in tides for the cryptocurrency. As regulatory approvals pave the way for increased investment opportunities in Ethereum, the crypto market is poised for further growth and development. The impact of these developments on Ethereum’s ecosystem and market price remains to be seen, but the signs point towards a positive trajectory for the second-largest cryptocurrency by market capitalization.
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