Ethereum ETFs Celebrate First Anniversary
Ethereum ETFs are turning one year old, and they are gaining momentum after experiencing a slow start. Since their approval by the SEC a year ago, these funds now manage assets worth $15.7 billion. While they did not enjoy the explosive debut that bitcoin ETFs did in January 2024, the journey has been more measured yet promising.
According to Nic Roberts-Huntley, CEO and co-founder of Blueprint Finance, the slower growth of ethereum ETFs compared to bitcoin’s debut reflects the complexity of ethereum’s value proposition rather than inherent weakness. In their initial trading week, ethereum ETFs faced significant outflows amounting to hundreds of millions of dollars. In contrast, bitcoin ETFs witnessed over $1 billion in inflows within their first few days, indicating a different trend in institutional adoption.
Roberts-Huntley explained that many firms are initially gravitating towards bitcoin before venturing into ethereum as they comprehend the infrastructure layer. Ethereum ETFs recorded record inflows right before their first anniversary, attracting $726.6 million on July 16, $600 million on July 17, and a remarkable $2.12 billion for the entire week. This surge in interest hints at a potential $10 billion net inflow in the second half of 2025, as investors begin to grasp ethereum’s opportunities better.
The stablecoin market cap currently stands at $262 billion, with stablecoins on the ethereum blockchain holding a dominant position at $130 billion. Juan Leon, senior investment strategist at Bitwise, believes that regulatory clarity surrounding stablecoins and the rise of tokenization will play a crucial role in ethereum’s growth. Leon predicts a significant uptick in institutional investor appetite as ethereum’s use cases gain traction.
Ethereum, the second-largest cryptocurrency with a $450 billion market cap, has been performing well recently, showing a 22% increase in the past week. David LaValle, global head of ETFs at Grayscale, observes that as ethereum ETFs mark their first anniversary, key performance indicators like client engagement, trading volumes, and fund flows are on the rise. LaValle foresees a continued adoption of ethereum ETFs as investors explore alternatives beyond bitcoin in the crypto space.
The most successful ethereum ETF, iShares Ethereum Trust ETF, boasts $9.6 billion in assets under management. Other top funds include Grayscale Ethereum Trust ETF, Fidelity Ethereum Fund, Grayscale Ethereum Mini Trust ETF, and Bitwise Ethereum ETF, managing varying amounts of assets under management.
Looking ahead, the possibility of enabling staking within ethereum ETFs could further boost their performance. Staking involves locking up coins to earn rewards for securing the blockchain. While US spot ethereum ETFs currently do not allow staking, a change could be on the horizon. Nasdaq has filed an amended application with the SEC to incorporate staking into the iShares Ethereum Trust, a move supported by many firms and crypto insiders.
Jason Linehan, VP of strategy at SharpLink Gaming, emphasizes the importance of approving staked ETH ETFs to allow more investors to benefit from ethereum’s staking yield. This change would also enhance the security and economic potential of the ethereum platform, making it more attractive to stablecoin and tokenized RWA issuers. Roberts-Huntley echoes this sentiment, stating that staking-enabled ETFs will revolutionize the institutional approach towards productive digital assets, unlocking the full potential of ethereum as an investment.
