Institutional Demand Drives Record-Breaking Inflows to Ethereum ETFs

Ethereum-focused exchange-traded funds (ETFs) saw record-breaking growth in December, with total net inflows reaching $2.08 billion, nearly double November’s figures.

BlackRock’s ETHA fund led the surge, pulling in $1.4 billion, followed by Fidelity’s FETH at $752 million. In contrast, Grayscale’s ETHE recorded $274 million in outflows.

Analysts suggest the influx was driven by shifting market dynamics, fresh capital for the new year, and rising interest in DeFi and AI projects tied to Ethereum. December’s activity brought cumulative net inflows for Ethereum ETFs to over $2.6 billion, with total assets exceeding $12 billion, representing more than 3% of Ethereum’s market cap.

The surge came during a volatile month for Ethereum, which briefly rallied above $4,000 before settling near $3,500. As of now, Ethereum trades at $3,409, up 2.23% in the past 24 hours.

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Bitcoin ETFs, while also strong, saw slower growth compared to November. December’s net inflows totaled $4.5 billion, bringing the year’s cumulative inflows to $35.24 billion and total assets to $105.4 billion—roughly 5.7% of Bitcoin’s market cap. Bitcoin reached its peak price of $108,135 in mid-December and currently trades at $95,556.

Experts like Augustine Fan of SOFA.org highlight that institutional inflows remain a driving force behind the performance of spot crypto ETFs, reflecting the growing influence of traditional finance on the crypto market.

Kosta Gushterov