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ETF demand is strong, Ethereum drives cryptocurrency surge over the weekend
Ethereum spot ETFs listed in the United States have attracted over $6.7 billion in inflows this year.
Author: Long Yue
Source: Wall Street News
As the second-largest cryptocurrency by market capitalization, Ethereum (Ether) outperformed other major digital assets over the past weekend.
During Monday's Asian trading session, its price rose 2.9% at one point, breaking through $4,300 to reach the highest level since December 2021. Over the past 7 days, Ethereum has gained more than 20% cumulatively. Meanwhile, Bitcoin's price also surpassed $121,000 today, approaching its all-time high.
Behind this rally is growing interest from large investors. Data shows that nine Ethereum spot ETFs listed in the United States have accumulated a net inflow of over $6.7 billion so far this year. In addition, so-called "digital asset financial companies"—listed companies that have shifted their business focus to accumulating cryptocurrencies—have also contributed to Ethereum's rise. According to data compiled by strategicethreserve.xyz, these companies have so far stockpiled Ethereum worth approximately $13 billion.
Sean McNulty, Head of APAC Derivatives Trading at digital asset prime brokerage firm FalconX Ltd, stated that the shift of funds from Bitcoin to Ethereum constitutes a "significant positive sentiment shift driven by strong spot ETF inflows, growing corporate treasury adoption, and broader stablecoin tailwinds."
The options market also reflects bullish sentiment, with Ethereum's overall put-call ratio at 0.39. According to Deribit data, the highest concentration of call options expiring on December 26 is at the $6,000 strike price.
Interestingly, Eric Trump, son of U.S. President Donald Trump, cheered for Ethereum's rally on the X platform. According to a Bloomberg report last Friday, large investors are in discussions about plans by World Liberty Financial, a Trump family-backed enterprise, to establish a listed company holding its WLFI tokens.
### Reversal of ETF Fund Flows
Changes in capital flows are the most direct reflection of market sentiment. As noted in a Wall Street News article, U.S. Ethereum spot ETFs have continued to record net inflows since May, and their ability to attract funds has significantly surpassed that of Bitcoin recently. Data shows that in six consecutive trading days in late July, the total net inflow into Ethereum ETFs approached $2.4 billion, far exceeding the $827 million in Bitcoin ETFs over the same period.
This trend is also reflected in price performance and the derivatives market. Over the past few weeks, Ethereum has consistently outperformed Bitcoin, with their price ratio rebounding strongly from its lowest level since 2019. Meanwhile, the annualized premium of CME Ethereum futures over spot has exceeded 10%, higher than that of Bitcoin, prompting some traders to shift positions from Bitcoin to Ethereum.
### Shift in Market Dominance from Bitcoin to Ethereum?
Following the move by many companies to adopt Bitcoin as a treasury reserve asset, a similar trend is repeating with Ethereum. Goldman Sachs' crypto team pointed out that similar to the growing number of companies incorporating Bitcoin into their treasury reserves, some U.S. listed companies have recently begun building Ethereum reserves. It is estimated that these companies purchased over $1.5 billion worth of ETH in the past month.
At the same time, Ethereum has significantly outperformed Bitcoin in the past few weeks, with their price ratio rebounding strongly from the earlier multi-year low (since 2019). The annualized premium of CME Ethereum futures over spot has exceeded 10%, surpassing that of Bitcoin, prompting some position shifts from Bitcoin to Ethereum.
Swiss blockchain research firm Swissblock expects this trend to continue, believing that "as the market enters a new cycle, ETH is replacing BTC as the market leader."
Disclaimer: The views in this article only represent the author's personal opinions and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness, originality, or timeliness of the article's information, nor shall it be liable for any losses arising from the use or reliance on such information.
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