The US Ethereum ETFs market has made a notable turnaround, as record inflows signal renewed investor confidence. Following a challenging six-week outflow streak, the market experienced a significant boost with substantial fund inflows, marking a critical milestone.
According to data from SoSoValue, US spot Ethereum ETFs have rebounded impressively, showcasing a dramatic shift from six weeks of persistent outflows to hitting their highest weekly inflows since early August. On Friday, these funds saw an infusion of $58.7 million, contributing to a total weekly inflow of $84.5 million.
Prominent among these funds, Fidelity’s FETH fund led the pack, accumulating $42.5 million on Friday alone. Meanwhile, BlackRock’s ETHA fund also gained traction, drawing in $11.5 million and achieving a remarkable milestone of surpassing $1 billion in total assets within two months of its launch. This achievement positions BlackRock’s fund alongside the prestigious Grayscale’s Ethereum Mini Trust as one of the few funds to reach such a valuation.
Ethereum Liquid Index has shown a steady upward trend since early September. Source: Brave New Coin’s Ethereum Liquid Index (ELX).
This accomplishment is noteworthy. Nate Geraci, president of The ETF Store, emphasizes that BlackRock’s $1 billion fund now ranks within the top 20% of over 3,700 ETFs in the US market, underscoring the growing demand for cryptocurrency investments from both institutional and individual investors.
Ethereum ETFs Gain Momentum Amid Changing Market Sentiment
The positive trend is not restricted to BlackRock and Fidelity. Other Ethereum ETFs also experienced noteworthy inflows on Friday. Bitwise’s ETHW saw $5.4 million, Invesco’s QETH received $4.3 million, Grayscale’s ETH added $2.3 million, VanEck’s ETHV gained $2.0 million, and 21Shares’ CETH recorded $1.4 million. While Franklin’s EZET remained neutral with no net inflow or outflow, Grayscale’s ETHE experienced a $10.7 million outflow.
The revival of interest in Ethereum ETFs is significant amid the broader cryptocurrency market context. The price of Ether has recently outpaced Bitcoin, spurred by renewed optimism among futures traders following the Federal Reserve’s recent rate cut. Additionally, Ethereum network transaction fees have surged, indicating increased blockchain activity.
As of September 29th, 2024, Ether’s price stood at $2,647, with its market capitalization reaching $318.2 billion, according to Brave New Coin’s Ethereum Liquid Index. Despite this considerable valuation, it still trails behind Bitcoin’s $1.298 trillion market cap. However, recent developments in the ETF space, Ethereum’s shift to a Proof-of-Stake consensus mechanism, and rising institutional adoption suggest the gap may be narrowing.
Ethereum’s Aspirations to Challenge Bitcoin’s Market Dominance
The resurgence in Ethereum ETF inflows has reignited discussions about its potential to challenge Bitcoin’s market dominance. If Ethereum reached Bitcoin’s current market cap of $1.298 trillion, the price of Ether could soar to approximately $10,785 based on the current circulating supply of 120,366,230 ETH. This scenario would represent a remarkable 309% increase from its current trading price.
While such a dramatic shift seems ambitious, several factors are in Ethereum’s favor. Vitalik Buterin, Ethereum’s co-founder, recently outlined a set of guiding principles aimed at ensuring alignment within the Ethereum ecosystem. These principles emphasize open-source development, open standards, decentralization, and security. Buterin also stressed the importance of collaboration and alignment towards Ethereum’s goals and the broader global blockchain community.
“My ideal goal here is to see more entities like L2beat emerging to track how well individual projects are meeting these criteria,” Buterin stated in his blog, highlighting the community’s commitment to transparency and accountability.
Rebound in Sight for Ethereum Amid Market Volatility
Despite recent positive developments, the cryptocurrency market remains highly volatile. Since May 2024, Ether’s price has experienced a notable correction, falling from $3,974 to $2,649 – a 33% decline. This bearish trend has led some analysts to project a potential further drop of 18.7% before the asset retests its major support trendline, established on June 22.
However, historical data indicates that such retracements often precede significant rallies. Previous reversals from this dynamic support level have led to a doubling of the altcoin’s value, suggesting current price levels may represent a key accumulation zone for long-term investors.
The potential for Ethereum to match Bitcoin’s market cap is supported by its expanding presence in the decentralized finance (DeFi) ecosystem and increasing institutional investment. The recent surge in ETF inflows underscores growing confidence in Ethereum’s long-term potential.