The data from Farside Investors indicates that the total net inflows into Ether exchange-traded funds (ETFs) have surpassed $2.6 billion in December, marking a significant milestone for these funds.
Ethereum vs Bitcoin: The ETF Competition Heats Up
In November and December, Ether ETFs experienced eight straight weeks of net inflows, with a record-breaking $2.2 billion in the week of November 26. This surge in popularity can be attributed to the growing adoption of Ethereum (ETH) as a viable alternative to Bitcoin (BTC). According to CoinShares data, Ether ETFs still lag behind BTC ETFs, which closed out 2024 with net inflows exceeding $35 billion.
Analysts Predict Reversal in Favor of ETH ETFs
According to analysts, this trend could reverse in 2025, especially if ETH’s price performance enhances ETF returns and regulators allow the funds to generate yields from staking. Staking is a process that enables users to earn rewards by holding and validating transactions on the Ethereum network.
Top Ether Funds: BlackRock Leads the Pack
Among the top Ether funds, BlackRock’s iShares Ethereum Trust (ETHA) led the pack with net inflows of over $3.5 billion in 2024. Fidelity’s Ethereum Fund (FETH) notched second place with $1.5 billion in net inflows. However, Grayscale’s Ethereum Trust (ETHE), which was launched in 2017 as a non-listed trust, saw net outflows of over $3.6 billion.
The Rise and Fall of Grayscale’s ETHE
Grayscale’s ETHE charges management fees of 1.5%. In July, the asset manager listed Grayscale Ethereum Mini Trust as a cheaper alternative. Despite this move, Grayscale’s ETHE continued to experience significant net outflows. This highlights the growing competition in the ETF market and the need for fund managers to innovate and adapt to changing investor preferences.
Will ETH Outperform BTC ETFs in 2025?
Since November, ETH has outperformed BTC in crypto spot and derivatives markets, according to a December report by Bybit, a leading cryptocurrency exchange. This trend could continue into 2025, especially if Ethereum’s network activity increases due to the proliferation of artificial intelligence agents.
Matt Hougan on Ethereum’s Potential
In an interview with Cointelegraph, Matt Hougan, Bitwise’s head of research, noted that sustained growth in network activity, including from AI agents, could further propel Ether’s performance. Ethereum and Base, an Ethereum layer-2 scaling network, are "where many AI agents are currently operating," according to Hougan.
VanEck Predicts ETH Price Surge
Asset manager VanEck estimates Ether’s spot price will reach $6,000 by the fourth quarter of 2025. This prediction highlights the growing optimism surrounding Ethereum’s potential for growth and adoption.
Conclusion
The surge in net inflows into Ether ETFs is a significant milestone for the cryptocurrency market. With sustained growth in network activity and increasing adoption, ETH could potentially outperform BTC ETFs in 2025. As regulators continue to allow staking yields from ETH funds, investors may find more attractive options in the Ethereum ecosystem.
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