Ether (ETH) exchange-traded funds (ETFs) in the United States saw a significant inflow of capital, recording a net inflow of $393 million during the month, according to a report by Farside Investors.
This surge in investment in spot ether ETFs comes in stark contrast to the net outflow of $376 million seen in Bitcoin (BTC) ETFs during the same period.
According to Glassnode data, the nine U.S.-listed Ether spot funds saw inflows seven times higher than in January. Notably, these funds saw outflows on just two trading days during the month. In contrast, the 11 Bitcoin funds faced weak sentiment, attracting inflows on just four trading days during the month.
Despite the significant shift in investor interest towards ether, the cryptocurrency has not seen a similar price increase. Since falling to $2,000 on some exchanges at the beginning of the month, ether has been trading in a tight range between $2,600 and $2,800. Similarly, bitcoin has remained below $100,000, with both cryptocurrencies seeing volatile price movements, especially in the meme sector.
The shift toward ether ETFs is partly due to carry trading strategies, where investors buy spot ETFs and short ether futures on the CME at the same time. Some of this activity may also represent bullish directional bets on the cryptocurrency.
Looking ahead, market participants are anticipating potential increases in the price of Ether due to the upcoming Pectra upgrade on April 8. This upgrade is expected to boost Ethereum’s performance by improving the execution and consensus layers, which could help it maintain a competitive advantage over other Layer 1 blockchains like Solana.
Nick Forster, founder of Derive.xyz, expressed optimism about the prospects of ether, pointing to the technical improvements and network enhancements that the Pectra upgrade will bring. He highlighted Ethereum founder Vitalik Buterin’s efforts to increase the gas limit at Layer 1 by a factor of ten, which could lead to better application development and security.
Additionally, the Ethereum Foundation’s recent $120 million investment in DeFi projects is seen as a sign of growing institutional adoption and interest, especially through initiatives like ETHrealize, led by Vivek Raman, which seeks to bring traditional financial institutions into the blockchain space.
Forster concluded with a positive outlook on the price trajectory of ether, saying: “There is now a 30% chance that ether will exceed $3,000 by the end of the quarter, up from 28% last week.”
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