In a surprising turn of events, Ethereum Spot ETFs have outshined their Bitcoin counterparts in the first week of February 2025, recording net inflows of $420 million, double the size of the Bitcoin ETF market. This impressive performance comes despite a bearish trading week for Ethereum, which saw its price decline by 16.18%.
The increased market interest in Ethereum Spot ETFs can be attributed to a spike in ETH being used as a preferred asset for CME basis trade over Bitcoin. The CME basis trade, a strategy where investors go long on an asset in the spot market and short in the futures market, has proven more profitable for Ethereum, with a 16% gain compared to Bitcoin’s 10% over the last week.
Among the Ethereum ETFs, BlackRock’s ETHA emerged as the investors’ favorite, attracting total net deposits of $286.81 million, followed by Fidelity’s FETH with $97.28 million. Other notable players such as Grayscale’s ETHE, ETH, Bitwise’s ETHW, and 21 Shares’ CETH also recorded modest net inflows between $4 million and $18 million.
Despite the positive inflows, the net assets of Ethereum Spot ETFs declined to $9.88 billion over the last trading week, with these ETFs now controlling 3.17% of the ETH market cap. This decline can be attributed to the overall bearish sentiment in the cryptocurrency market.
As of writing, Ethereum trades at $2,681, a 1.46% increase in the last 24 hours, with a daily trading volume of $16 billion, down by 45.15%. Technical analysis suggests a potential price reversal, with the Relative Strength Index currently at 34.03 and heading upwards. However, market bulls will face strong resistance in the $3,400 price zone, and pushing past this level could pave the way for a return to the local market peak of $4,000.
The outperformance of Ethereum Spot ETFs over their Bitcoin counterparts indicates a growing institutional interest in Ethereum as an investment asset. This trend may continue as more investors recognize the potential of Ethereum and its underlying blockchain technology. However, the overall market sentiment and regulatory developments will play a crucial role in determining the future trajectory of Ethereum and its associated investment products.
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Tags: Ethereum Spot ETFs, Bitcoin ETFs, Institutional Investment, CME Basis Trade, Cryptocurrency Market, Technical Analysis