Ethereum (ETH) Takes the Lead as Institutional Investors Flock to the Crypto Market
It seems that institutional investors are flocking to Ethereum (ETH-USD) over Bitcoin (BTC-USD) as the crypto markets recover from a recent slump.
Institutional investors appear to be favoring Ethereum (ETH-USD) over Bitcoin (BTC-USD) as the crypto market recovers from a recent downturn. According to a CoinShares report published on August 12, Ethereum exchange-traded products (ETPs) saw a significant inflow of $155 million for the week ending August 11. This remarkable figure constitutes 88% of the total $176 million that flowed into crypto investment products during that period.
CoinShares attributes this strong preference for Ethereum to the recent launch of U.S. spot-based Ethereum ETFs. With year-to-date inflows now reaching $862 million, Ethereum is experiencing its highest inflows since 2021. Notably, Bitcoin ETPs only managed to attract $13 million in inflows for the same week, with outflows of $366 million month-to-date.
The Grayscale Ethereum Trust (ETHE) also had a significant moment recently, posting its first day of zero outflows since converting to a spot ETF, according to Farside Investor’s data. Given that ETHE had been hemorrhaging funds—losing nearly $2.3 billion in Ether since its launch—this is a noteworthy development. In comparison, Grayscale's Bitcoin Trust (GBTC) took nearly four months to achieve a similar milestone.
Meanwhile, Ethereum's on-chain activity is also surging, with a 12% increase in trading volumes on Ethereum-based decentralized exchanges (DEXs) recently. Layer-2 networks like Base and Arbitrum (ARB-USD) are also seeing record numbers of active users. On August 12, Ethereum's layer-2 networks handled a combined 298 transactions per second, indicating a bustling Ethereum ecosystem.
As these outflows from Ethereum ETFs continue to dwindle, analysts are watching them closely, considering them a potential bullish catalyst for the cryptocurrency. If past trends hold, ETH's price could follow a similar path to Bitcoin after its spot ETF approvals, which initially saw heavy outflows but ultimately paved the way for a price surge.
Investors interested in comparing Bitcoin ETFs can utilize TipRanks’ Bitcoin ETF Comparison tool to aid their investment decisions.
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