Net Inflows into Ether ETFs Gain Momentum
Analysts expect the trend of net inflows into Ether (ETH) exchange-traded funds (ETFs) to continue and potentially outperform Bitcoin (BTC) ETFs in 2025. According to data from CoinShares, Ether ETFs have seen seven consecutive weeks of net inflows, including a record-breaking $2.2 billion in the week of November 26.
Current Market Trends
As of December 16, the momentum behind Ether ETFs is "currently on pace with gold ETFs," but Nate Geraci, president of The ETF Store, expects this trend to accelerate in the coming months. This acceleration could be driven by strong spot ETH price performance, which has already outperformed BTC in crypto markets.
Performance Comparison
In a recent report by Bybit, a cryptocurrency exchange, Ether was shown to have outperformed Bitcoin in both spot and derivatives markets since November. Meanwhile, Bitcoin ETFs saw their largest net outflows on December 19.
Key Factors Driving Growth
Several factors could contribute to the sustained growth of Ether’s performance:
- Increased network activity: The proliferation of artificial intelligence agents is driving increased usage of Ethereum and Base, an Ethereum layer-2 scaling network.
- Underestimation: Many assume that AI activity is happening on Solana, but a significant portion is actually taking place within the ETH ecosystem.
VanEck Estimates
Asset manager VanEck estimates that Ether’s spot price will reach $6,000 by the fourth quarter of 2025. Furthermore, they predict that the Ethereum network will generate up to $66 billion in annual free cash flow by 2030, driving spot ETH’s price as high as $22,000.
Staking in ETFs
United States-based Ether ETFs may soon feature staking yields, according to Bernstein Research. Staking involves locking up ETH as collateral with a validator on the Ethereum network and earning ETH payouts from network fees and other rewards. As of December 20, staking Ether earns roughly 3.35% in annualized percentage returns (APR), denominated in ETH.
Regulatory Environment
On December 19, the US Securities and Exchange Commission simultaneously approved two ETFs comprising a market-weighted index of BTC and ETH. This development creates another potential avenue to boost ETH fund inflows and enhance staking yields in the US.
Expert Insights
Matt Hougan, Bitwise’s head of research, emphasizes that:
- "A lot of people assume it’s happening on Solana. Actually, a lot of it is happening in the ETH ecosystem."
- He believes that Ether is underestimated and is bullish on both Ethereum and Base.
Conclusion
The momentum behind net inflows into Ether ETFs shows no signs of slowing down. Analysts expect this trend to continue and potentially outperform Bitcoin ETFs in 2025. Several factors, including strong spot ETH price performance, increased network activity, and the potential for staking yields in US-based ETFs, could contribute to this growth.
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