Recently, a report from CoinShares revealed an interesting trend in the cryptocurrency market. Ethereum (ETH) witnessed a surge in inflows, outpacing Solana (SOL) for the year 2024. This surge came in anticipation of the launch of exchange-traded funds (ETFs) that would allow regulated investment in Ethereum in the US, the second-largest cryptocurrency by market capitalization. Ethereum saw inflows of $45 million last week, totaling over $103 million for the year, surpassing Solana’s inflows for the year. Despite this, Solana also experienced inflows of $9.6 million last week, amounting to $71 million for the year, albeit lagging behind Ethereum’s inflows.
The report highlighted the strong market momentum for Ethereum over the past month. In addition to the significant inflows, other altcoins also saw some traction. Litecoin was the only other altcoin besides Ethereum to receive inflows exceeding $1 million, with $2.2 million recorded last week. Overall, digital asset investment products continued to attract buying interest, with inflows totaling $1.35 billion last week, contributing to the recent recovery in crypto prices. The trading volumes of exchange-traded funds also saw a notable increase of 45% week-on-week to $12.9 billion.
On the other hand, Bitcoin (BTC) recorded $1.27 million in inflows last week. However, short-bitcoin ETPs observed outflows of $1.9 million, with total outflows amounting to $44 million since March, representing 56% of the assets under management (AuM). In terms of regulatory developments, the Securities and Exchange Commission (SEC) is set to fully approve spot Ethereum ETFs, paving the way for a second cryptocurrency investment vehicle in the US. This approval is expected to attract significant retail and institutional investor cash, similar to the approval of Bitcoin ETFs earlier this year.
Industry experts are closely watching the impact of the SEC’s approval of Ethereum ETFs on the cryptocurrency market. James Seyffart, a Bloomberg ETF expert, anticipates that the Ethereum ETFs will begin trading soon after approval. This regulatory milestone is expected to have a significant impact on the Ethereum blockchain and its decentralized finance (DeFi) protocol. Mark Connors, the head of global macro strategy at Onramp, referred to Ethereum as the “middle kid protocol,” emphasizing the crucial role that the ETF launch plays in testing the DeFi ecosystem. The success of the ETF launch will shed light on Ethereum’s ability to maintain market standing, attract interest, and drive price appreciation through increased inflows and adoption.
The recent surge in Ethereum inflows and the impending launch of Ethereum ETFs signal a promising outlook for the cryptocurrency. As regulatory developments continue to shape the market landscape, all eyes are on Ethereum’s performance and its ability to capitalize on the growing interest from investors.