Global Ethereum investment products hit $2.2 billion annual inflow record amid US ETF surge

Global Ethereum-based funds run by asset managers such as BlackRock, Bitwise, Fidelity, Grayscale, ProShares and 21Shares registered $634 million in net inflows last week, reaching a new annual record, according to CoinShares.

The “dramatic turnaround” in sentiment for the asset saw year-to-date net inflows reach $2.2 billion — surpassing the prior $2 billion peak set in 2021 with a month to spare, according to Head of Research James Butterfill.

Weekly crypto asset flows. Images: CoinShares.

The U.S. spot Ethereum exchange-traded funds led the flows, adding $466.5 million in a reduced trading week due to the Thanksgiving holiday — still the second-largest since the ETFs began trading in July. 

Alongside the “likely approval” of staking yields on the products under a crypto-friendly “Trump 2.0” Securities and Exchange Commission, the recent inflection in Ethereum ETF inflows is another catalyst making ether's risk-reward look attractive, analysts at Bernstein argued on Monday.

Despite a tepid launch, the funds have attracted more than $1.1 billion in net inflows since the U.S. election, overcoming substantial initial outflows from Grayscale’s converted and higher-fee fund, ETHE, to reach $583.8 million total net inflows, with $11 billion in assets under management. On Friday, the spot Ethereum ETFs registered $332.9 million compared to $320 million for their Bitcoin counterparts, and continued strong inflows would further strengthen the asset’s positive demand-supply dynamics, the analysts said.

“For the first time, Ethereum outpaced Bitcoin in inflows at these high levels. Ethereum’s performance reflects renewed investor interest, with a 47.15% monthly gain, nearing its ETF announcement peak of $4,095,” BRN analyst Valentin Fournier wrote.

“The global crypto market cap has risen by 72% since the U.S. election to $3.43 trillion, outpacing the growth of Bitcoin and Ethereum,” Fournier continued. “This suggests early signs of an alt-season.”

XRP funds hit weekly inflow record amid price spike while Bitcoin products witness outflows

Meanwhile, global XRP-based funds generated a record $95 million in net weekly inflows amid a 69% price rise over the past seven days that has seen the digital asset surpass SOL and USDT to reclaim crypto's third spot by market cap. Butterfill said the inflows were likely due to the hype surrounding the potential for a U.S. spot XRP ETF.

It wasn’t such a good week for bitcoin, however, struggling with a $100,000 psychological resistance level that saw it fall around 7% early last week before recovering to the $96,000 range. The sentiment was reflected in the global fund flows, with $457 million exiting Bitcoin-based investment products last week — $135.1 million of which from the U.S. spot Bitcoin ETFs.

“Bitcoin dominance has dropped by 5% over the past 12 days, breaking below the positive trendline established in June 2023,” BRN’s Fournier said. “With significant resistance at $100K, the market is seeing a capital shift towards altcoins, supported by increasing liquidity.”

Overall, digital asset investment products saw an eighth consecutive week of net inflows, adding $270 million globally, led by $266 million from the U.S.-based funds alone, with year-to-date inflows now at a fresh peak of $37.3 billion. 

“Since the launch of options on U.S. ETFs, despite their high initial volumes, we have not seen a commensurate rise in ETP volumes at $22 billion last week, compared to $34 billion the week prior,” Butterfill noted.