Ethereum's recent performance surpasses Bitcoin, ETF inflows reach historic highs
JPMorgan recently released a report indicating that Ethereum ($ETH) has outperformed Bitcoin ($BTC) in the past month, primarily driven by strong capital inflows into spot ETFs and growth in corporate inventory allocation. Data shows that in July, spot Ethereum ETFs recorded a record $5.4 billion in inflows, nearly on par with the inflows of Bitcoin ETFs during the same period.
JPMorgan analysts noted that while Bitcoin ETFs saw a slight outflow of funds in August, Ethereum funds continued to attract capital inflows. This surge occurred after the passage of stablecoin legislation in the U.S. (GENIUS Act), and as the market anticipated a vote on broader cryptocurrency market structure legislation by the end of September.
JPMorgan Reveals Four Key Factors Behind Ethereum's Strength
JPMorgan analysts detailed the four main factors behind Ethereum's strong recent performance in their report.
Firstly, investors expect that the U.S. Securities and Exchange Commission (SEC) will ultimately approve the staking feature of spot Ethereum ETFs, which will transform these products into investment tools capable of generating income while lowering the technical barriers to participation.
Secondly, corporate demand is rising. According to data from Strategic ETH Reserve, more than 10 publicly traded companies currently hold Ethereum, totaling about 2.3% of the circulating supply. Some of these companies may seek to earn additional income through staking or decentralized finance (DeFi) strategies.
Source: Strategic ETH Reserve More than 10 publicly traded companies currently hold Ethereum
The third key factor is that the SEC has signaled that liquid staking tokens may not meet the definition of securities, alleviating concerns among institutional investors.
Further Reading
SEC Approval! Why is it important that Bitcoin and Ethereum spot ETFs can create physical redemptions?
SEC regulatory stance changes, physical redemption mechanism enhances efficiency
The fourth factor is the SEC's approval of the physical redemption mechanism for spot cryptocurrency ETFs, which is expected to lower costs, improve liquidity, and limit forced sell-offs during large redemption periods.
Further Reading
New SEC Guidelines: Specific liquid staking not considered securities! Is Ethereum ETF staking possible?
This approval allows institutions to redeem ETF market share directly in cryptocurrency instead of cash. JPMorgan analysts pointed out that this brings higher efficiency, lower costs, and greater market liquidity to ETFs.
JPMorgan analysts believe that compared to Bitcoin, Ethereum has more room for growth in ETF and corporate inventory adoption. Currently, the amount of Ethereum held by companies and institutions still lags behind Bitcoin. If the adoption trend continues, it will leave room for further capital inflows. As the regulatory environment improves and institutional adoption increases, Ethereum is gradually being seen as a fully functional financial infrastructure platform, which may be a key reason for its relative appeal to institutions over Bitcoin.
This content is generated by Crypto Agent summarizing various information, reviewed and edited by Crypto City. It is still in the training stage and may contain logical biases or informational errors. The content is for reference only and should not be considered investment advice.
‘Optimistic about overtaking Bitcoin, JPMorgan lists '4 Advantages', is Ethereum the new favorite of institutions?’ This article was first published in 'Crypto City'
