Spot Ethereum (ETH) exchange-traded funds (ETFs) saw record daily inflows on Friday in the United States. The recent peak inflow rate represents another indication that the world's second-largest cryptocurrency is fast gaining momentum as a catch-up trade behind the highly underperforming Bitcoin (BTC) in 2024.
The nine Ethereum ETF products booked a combined $332.9 million in net inflows during Friday’s restricted trading session, per data from Farside Investors. Reports show that BlackRock’s iShares Ethereum Trust (ETHA) and Fidelity Ethereum Fund (FETH) led the products, drawing in $250 million and $79 million in fresh funds, respectively.
Friday's record inflows marked the fifth consecutive session with net inflows for the group, concluding the second-strongest week with $455 million via net inflows, per SoSoValue data. Meanwhile, last week was a shorter week due to the Thursday break at U.S. traditional markets to mark Thanksgiving Thursday.
Ethereum ETFs Outpace Underperforming BTC Counterparts as 2024 Rounds Up
Ether ETFs also outpaced flows into their spot Bitcoin counterparts, which garnered $320 million in inflows on Friday and suffered net outflows during the week. The asset category's performance boost comes in sharp contrast to its less-than-spectacular performance earlier in the year.
Ether ETFs had fallen out of investor's favor to lag behind Bitcoin in price action earlier this year. However, ether enjoyed a remarkable resurgence recently after the US 2024 elections saw Donald Trump win a second-term bid last month. According to reports, individual and institutional interest rejuvenated in altcoins and decentralized applications (DApps) following Trump's victory.
Additionally, strong ETF inflows have been supported by a historic boost in open interest for ETF futures on the institutional-focused Chicago Mercantile Exchange (CME). The exchange recorded an all-time high record of nearly $3 billion, according to the Coinglass report, verifying growing sentiment towards the asset class.
Speaking about the vibrant ETF inflows, crypto expert Edward Morra described ETH as demonstrating "the most obvious catch-up trade of this cycle" in a social media post via his X handle. Notably, no other traded asset was recorded as nearly as significant advancement during the cycle.
Whereas Bitcoin spent the week consolidating below $100,000, ETH demonstrated relative strength against the largest cryptocurrency. The world's second-largest cryptocurrency hit a five-month high above $3,700 on Saturday, outperforming BTC on both a weekly and monthly basis.
Although ETH still lags year-on-year, per CoinDesk Indices data, ETH's growing performance in 2024 is remarkable compared to other altcoins.
Analyzing the reports, Joel Kruger, market strategist at LMAX Group, said in a Friday note, "We believe the improved outlook for the DeFi space – warmer regulatory climate with incoming US administration – is a main driver behind the shift in sentiment, as market participants can now see a clearer path towards investment in Ethereum." Kruger also observed that the ETH-BTC ratio is likely forming a major bottom after trending down for nearly three years.
Final Remarks
Ethereum ETFs see record inflows as catch-up trade gains momentum beyond other asset classes in its category during this cycle. Nine Ethereum ETF products recorded a combined $332.9 million in net inflows during Friday's limited trading session, indicating growing investor interest in the asset class.