Ethereum ETFs Attract More Institutional Inflows than Bitcoin ETFs for First Time

by

As a seasoned analyst with over two decades of experience in the financial markets, I must say that the recent shift in institutional interest from Bitcoin to Ethereum ETFs is quite intriguing. While Bitcoin has been the undisputed king of cryptocurrencies for a long time, its current struggles seem to have opened up a window of opportunity for Ethereum.

There’s been a noticeable increase in institutional interest towards Ethereum spot ETFs on November 26th. This change reflects a shift in investor attitudes as Ethereum ETFs attracted more than $40 million in daily investments, surpassing Bitcoin ETFs for the first time in a while.

On November 25, Bitcoin spot ETFs experienced a significant withdrawal of $438 million. This trend continued on November 26 with another $123 million in outflows, indicating that institutions are pulling back from Bitcoin ETFs for the second day in a row. Previously, there had been a week of consistent inflows into these ETFs.

Bitcoin ETFs Face Second Day of Outflows

Based on information from blockchain ETF tracker SoSoValue, Grayscale’s Bitcoin Trust (GBTC) and Fidelity Wise Origin Bitcoin Fund (FBTC) accounted for the largest outflows, with reported withdrawals of $36.14 million and $95.68 million, respectively.

As a crypto investor, I noticed that similar Bitcoin ETFs like the Invesco Galaxy Bitcoin ETF (BTCO) recorded a substantial withdrawal of approximately $2.27 million on November 26. This brings the total cumulative net inflow of the fund to $418.63 million. On the same day, other Bitcoin spot ETFs didn’t seem to attract any institutional interest whatsoever.

Remarkably, the iShares Bitcoin Trust (IBIT) by BlackRock, a product that typically attracted millions daily in net inflows, experienced no activity whatsoever, signifying its first day of inactivity in a long time.

On a Monday, the fund defied the general downward flow of investments, standing alone as the Bitcoin ETF drawing attention from investors. As per Coinspeaker’s report, IBIT saw an investment influx amounting to $267 million.

Ethereum ETFs Gain Institutional Momentum

Despite Bitcoin ETFs facing difficulties, Ethereum spot ETFs have been thriving with substantial investment inflows, potentially indicating a change in institutional attention. The BlackRock iShares Ethereum Trust (ETHA) saw a net influx of $50.13 million, while the Grayscale Ethereum Mini Trust (ETH) garnered an additional $16.28 million, making Ethereum ETFs a focal point in the market.

As reported by SoSoValue, the combined trading volume for Ethereum-based ETFs reached an impressive $418.49 million. Currently, these investment products boast a collective net asset value of approximately $9.80 billion.

At this point, Ethereum experienced a significant milestone, as institutional investors remained unfazed by its dip in value from $3,600 to $3,398.

Despite a downward trend in the crypto market, where Bitcoin has fallen to approximately $92,668 and is dragging other digital currencies lower, there’s increasing institutional investor confidence, as demonstrated by robust investments into Ethereum ETFs. These investors are placing their bets on a potential recovery for Ethereum, which is currently aiming at the $4,000 mark.

Historically, Bitcoin’s influence tends to lessen during market downturns, opening opportunities for alternative cryptocurrencies like Ethereum to thrive. This trend was noticeable in 2017 when Ethereum and other altcoins gained popularity while Bitcoin remained steady. Recent trading patterns and technical signs hint that Ethereum is regaining momentum in a similar way.

Currently, Ethereum’s Relative Strength Index (RSI) remains within a balanced range, suggesting potential for additional growth. The crypto currency has been consistently moving upwards, successfully breaching significant hurdles at $3,000 and $3,200.

Read More

2024-11-27 13:00