🚀 Ethereum ETFs Crush Bitcoin with $1.85B Inflows – 25x Dominance!

Wall Street's new golden child isn't Bitcoin—it's Ethereum ETFs, raking in a staggering $1.85 billion while leaving BTC in the dust. Here's why the smart money's flipping the script.

### The ETH ETF Revolution

Move over, 'digital gold.' Institutional investors are pouring cash into Ethereum funds like there's no tomorrow—proving even crypto can have a hype cycle 2.0. (Take that, Bitcoin maximalists.)

### By the Numbers

$1.85 billion flooded ETH ETFs last quarter—25 times more than Bitcoin's paltry crumbs. TradFi finally found its shiny new toy, and it's not the one your libertarian uncle HODLs.

### The Punchline

While bankers pretend they 'always believed' in smart contracts, one thing's clear: when Wall Street smells fees, even proof-of-stake turns into proof-of-profit. Welcome to decentralized finance—now with extra middlemen.

Key Takeaways

ETH ETFs outpaced BTC ETFs by 25x in weekly net inflows, pushing CME ETH basis trade to nearly 12%. Will $4K be reachable now? 

Ethereum [ETH] has flipped Bitcoin [BTC] on the ETF inflows. During the week, from the 21st to the 25th of July, ETH ETFs saw net inflows of $1.85 billion, about 25x more than $72 million seen by BTC ETFs. 

Now the ETH ETF complex holds over $20B in total assets. And half of that was driven by BlackRock’s ETHA, which crossed $10B recently. 

Source: SoSo Value

Hedge funds hunt ETH basis trade

But the remarkable ETH ETF flows appeared driven largely by hedge funds hunting for Basis trade.

This is a spread that occurs when funds buy spot ETH ETF and short the asset on CME (Chicago Mercantile Exchange) Futures. 

In fact, CME Futures Open Interest also reinforced the above basis trade thesis. Velo data showed that ETH’s interest surged to nearly 2 million coins compared to only 150K BTC on CME Futures. 

In addition, ETH CME annualized basis surged to nearly 12% from 8% this week.

Over the same period, BTC Basis fetched 9.4%, confirming that the divergence in the ETH ETF flows from BTC, in the past week, could have been driven by basis trade.  

Source: Velo 

ETH/BTC ratio says otherwise

Matter of fact, the massive divergence in ETF flows barely impacted the ETH/BTC ratio, an indicator of the perceived capital rotation between the top crypto assets.

Unlike the previous week’s 28% rally in ETH/BTC, which meant capital rotated from BTC to ETH, the indicator was muted this week.

No wonder most altcoins cooled off, as the ETH/BTC ratio is one of the barometers of the altcoin market segment. 

Source: ETH/BTC, TradingView 

Spot demand also gaining traction

But there was also genuine demand for spot ETH, especially from treasury firms front-running the expected stablecoin and tokenization booms. 

In fact, Ark Invest’s Cathie Wood noted that the recent rush to unstake ETH from validators was partly being driven by demand from ETH treasuries with 2x potential returns. 

Source: X

Coinbase analysts also reinforced a similar stance and added, 

“We think this (unstaking demand) paints a picture of a market reallocating capital in response to shifting yield opportunities rather than a loss of confidence in ETH or the ecosystem.”

And the shift was plausible. Staking rewards offered only 3% while basis trade had 12%  and nearly 2x potential returns on the ETH treasury.  

At press time, ETH traded at $3.7K and could attempt another stab at the $4K if the market sentiment remains positive.