Ethereum (ETH) exchange-traded funds (ETFs) achieved a historic milestone on Friday, attracting $333 million in net inflows. This marks a significant moment for Ethereum as it outperformed Bitcoin (BTC) ETFs, signaling a shift in investor focus toward the second-largest cryptocurrency.
Ethereum ETFs Reach All-Time High Inflows
On Friday, spot-based Ethereum ETFs in the U.S. reported their largest single-day inflows to date, highlighting growing institutional interest. Data from Farside Investors shows that a total of $332.9 million flowed into Ethereum-based ETFs during the shortened trading session:
- BlackRock’s iShares Ethereum Trust (ETHA) dominated with a massive $250 million in inflows.
- Fidelity’s Ethereum Fund (FETH) followed closely, securing $79 million.
The performance capped off an exceptional week for Ethereum ETFs, which brought in a total of $455 million despite the Thanksgiving holiday reducing market activity.
ETH ETFs Surpass Bitcoin in Investor Preference
Ethereum ETFs didn’t just break records—they also outperformed their Bitcoin counterparts. On Friday, spot Bitcoin ETFs recorded $320 million in inflows but experienced net outflows earlier in the week, underscoring Ethereum’s relative strength.
In addition to ETF success, Ethereum’s price also showed significant momentum:
- ETH climbed to a five-month high of $3,700 on Saturday.
- It outperformed Bitcoin both weekly and monthly, indicating growing investor confidence in ETH’s potential.
Why Ethereum Is Dominating the Market
Ethereum’s recent surge has led analysts to call it the “most obvious catch-up trade” of the current market cycle. After lagging behind Bitcoin for much of the year, Ethereum’s renewed strength is being driven by several key factors:
1. Resurgence of Decentralized Finance (DeFi)
Ethereum remains the foundation for DeFi applications, and a more positive outlook for the sector is rekindling interest among investors.
2. Favorable U.S. Regulatory Environment
With a new U.S. administration on the horizon, expectations for a friendlier regulatory climate are boosting optimism for Ethereum investments, including ETFs.
3. Institutional Demand Surges
The institutional interest in Ethereum is undeniable. Open interest in ETH futures on the Chicago Mercantile Exchange (CME) soared to an all-time high of nearly $3 billion, according to CoinGlass. This signals strong confidence from institutional investors betting on ETH’s future growth.
ETH-BTC Ratio: Signs of a Reversal
Analysts are closely watching the ETH-BTC ratio, which appears to be forming a bottom after a prolonged downtrend over the past three years.
Joel Kruger, market strategist at LMAX Group, highlighted this trend, linking Ethereum’s resurgence to DeFi optimism and regulatory clarity.
“The improved outlook for DeFi and a warmer U.S. regulatory climate are significant drivers behind Ethereum’s recent surge,” Kruger stated in his Friday note.
Final Outlook: Ethereum Takes Center Stage
Ethereum’s record-setting ETF inflows, strong institutional demand, and price outperformance are reshaping the cryptocurrency landscape. With $333 million in daily ETF inflows, ETH has proven its ability to attract investor capital at unprecedented levels, surpassing Bitcoin’s dominance.
As the market anticipates continued growth in decentralized finance and regulatory improvements, Ethereum is positioning itself as the “catch-up trade” of this cycle. With ETH climbing to multi-month highs and breaking records, the second-largest cryptocurrency is now firmly in the spotlight, signaling even greater potential in the months ahead.
