Ethereum ETFs Shine Amid Bitcoin's Institutional Outflows

December 30, 2024 12:00 AM AEDT | By Team Kalkine Media

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Ethereum ETFs Shine Amid Bitcoin's Institutional Outflows — Image source: shutterstock

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Highlights

- Ethereum ETFs see growing inflows while Bitcoin ETFs face declines.

- Institutional interest in Ethereum ETFs supported by key developments.

- Bitcoin hovers below its all-time high amidst market volatility.

Ethereum (ETH) continues to capture institutional attention, standing out as Bitcoin (BTC) faces a series of challenges. On Monday, Ethereum ETFs recorded significant inflows, marking a sharp contrast to the outflows from Bitcoin ETFs. According to data from Farside Investors, Ethereum ETFs attracted $130.8 million in institutional capital, while Bitcoin ETFs experienced a withdrawal of $226.5 million, marking Bitcoin’s third consecutive outflow amidst price volatility.

Key Developments Bolster Ethereum ETFs

The rise in Ethereum ETF inflows reflects a series of positive developments. Notably, the approval of the first Bitcoin-Ethereum ETF by the US Securities and Exchange Commission (SEC) has set the stage for further institutional capital entering the Ethereum space. Traders are also closely watching potential approvals to allow staking benefits for Ether ETFs, which could further enhance their appeal.

Recent research from IntoTheBlock highlights that December has been particularly strong for Ethereum ETFs, with inflows reaching $1.66 billion as of December 23. This figure represents a significant portion—74%—of the $2.24 billion total inflows recorded since Ethereum ETFs' inception. Among the key players, BlackRock’s iShares Ethereum Trust (NYSE:ETH) emerged as the biggest gainer, recording a single-day inflow of $292 million on December 5. Fidelity's FETH is another prominent ETF, attracting substantial interest alongside other smaller providers.

Bitcoin Faces Market Challenges

Bitcoin, in contrast, is navigating a challenging period. The cryptocurrency’s price remains volatile, hovering approximately 10% below its all-time high of $108,353. Despite a strong Q4 performance with gains nearing 53%, Bitcoin ETFs have faced consecutive outflows, reflecting a cooling of institutional demand.

Nevertheless, derivatives data from Coinglass shows optimism among traders for both Bitcoin and Ethereum. The long/short ratio remains greater than one for most exchanges, indicating expectations of potential recovery.

Ethereum and Bitcoin Price Movements

Ethereum is currently trading around $3,400, showing signs of resilience after recent corrections in the cryptocurrency market. Meanwhile, Bitcoin is attempting to breach the $99,000 resistance level, aiming for the $100,000 milestone. Weekly price charts for both assets suggest a potential recovery, signaling a possible shift in sentiment for cryptocurrencies as the year closes.

This growing divergence between Ethereum and Bitcoin ETFs highlights shifting preferences among institutional participants, as Ethereum benefits from a combination of regulatory milestones and enhanced product offerings.

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