The recent report from CoinShares has shed light on Ethereum’s significant uptick in inflows, surpassing those of Solana for the year 2024. This surge in inflows coincides with the impending launch of exchange-traded funds (ETFs) that will enable regulated investment in Ethereum in the US. The report highlights Ethereum’s strong momentum over the past month, with inflows reaching $45 million last week, totaling over $103 million for the year. On the other hand, Solana witnessed inflows of $9.6 million during the same period, resulting in a year-to-date total of $71 million, which falls behind Ethereum’s inflows.
Altcoin Inflows and General Digital Asset Investments
Among other altcoins, Litecoin was the only one to receive inflows exceeding $1 million, with $2.2 million recorded last week. General digital asset investment products saw continued buying, with inflows totaling $1.35 billion last week, pushing the three-week inflow streak to $3.2 billion. These inflows have been instrumental in driving the recovery of crypto prices in recent weeks.
Impact of ETFs on the Crypto Market
The trading volumes of exchange-traded funds increased significantly by 45% week-on-week to $12.9 billion. However, these volumes represented only 22% of the broader crypto market volumes, indicating a relatively lower proportion. The looming approval of spot Ethereum ETFs by the Securities and Exchange Commission (SEC) is expected to be a game-changer for the market. Industry experts speculate that the approval of Ethereum ETFs will bring significant impacts on the Ethereum blockchain and its decentralized finance (DeFi) protocol.
James Seyffart, a Bloomberg ETF expert, anticipates the commencement of trading for Ethereum ETFs tomorrow following the full approval by the SEC. This regulatory milestone is seen as a victory for the market, similar to the approval of Bitcoin ETFs in January. Market experts believe that the approval of Ethereum ETFs will not only attract billions of dollars in retail and institutional investor cash but also boost participation in the DeFi ecosystem.
Mark Connors, the head of global macro strategy at Onramp, referred to Ethereum as the “middle kid protocol,” emphasizing the critical test that the ETF launch poses for the DeFi ecosystem. The success and participation in the ETF launch will be a testament to Ethereum’s ability to maintain its market standing, attract sustained interest, and drive increased inflows and adoption. These factors are expected to have a substantial impact on Ethereum’s price in the market.
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