Ethereum ETFs See Record $333M Inflows, Outpacing Bitcoin Funds as Catch-Up Trade Gains Momentum

Spot ethereum (ETH) exchange traded funds (ETF) in the U.S. saw record daily inflows on Friday, another sign that the second-largest cryptocurrency is gaining momentum as a catch-up trade after vastly underperforming bitcoin (BTC) this year.

The nine products combined booked $332.9 million in net inflows during Friday's shortened trading session, <a href="https://farside.co.uk/eth/" target="_blank">data</a> compiled by Farside Investors shows. BlackRock's iShares Ethereum Trust (ETHA) and Fidelity Ethereum Fund (FETH) led, attracting $250 million and $79 million in fresh funds, respectively.

Friday was the fifth consecutive session with net inflows for the group, and concluded the second strongest week with $455 million in net inflows, per <a href="https://sosovalue.com/assets/etf/us-eth-spot" target="_blank">SoSoValue data</a>. It was a shorter week as U.S. traditional markets were closed on Thanksgiving Thursday.

Ether ETFs also outpaced flows into their spot bitcoin counterparts, which gathered $320 million inflows on Friday and suffered net outflows during the week.

After <a href="https://www.coindesk.com/markets/2024/11/19/ethereums-ether-has-fallen-out-of-investor-favor-and-how" target="_blank">falling out of investors' favor</a> and lagging behind bitcoin in price action and ETF flows this year, ether has enjoyed a resurgence recently as Donald Trump's election victory rejuvenated interest in altcoins and decentralized finance (DeFi) applications.

Along with strong ETF inflows, open interest for ETF futures on the institutional-focused Chicago Mercantile Exchange (CME) surged to all-time records of almost $3 billion, per <a href="https://www.coinglass.com/BitcoinOpenInterest" target="_blank">CoinGlass</a>, underscoring the improving sentiment towards the asset.

Read more: <a href="https://www.coindesk.com/markets/2024/11/27/think-ethereum-s-eth-is-dead-surging-metrics-show-otherwise" target="_blank">Think Ethereum’s ETH is Dead? Surging Metrics Show Otherwise</a>

Noting the strong ETF inflows, crypto trader Edward Morra called ETH "the most obvious catch-up trade of this cycle," in a Saturday <a href="https://x.com/edwardmorra_btc/status/1862782049209245759" target="_blank">X post</a>.

While bitcoin spent the week consolidating below $100,000, ETH also showed relative strength against the largest crypto. ETH's price hit a five-month high above $3,700 on Saturday and outperformed BTC on both a weekly and monthly basis, although it's still lagging year-on-year, CoinDesk Indices data shows.

It's possible that the ETH-BTC ratio is forming a major bottom after trending down for about three years, 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," said Kruger.