July’s Crypto Inflow Surge Puts ETH Demand in the Spotlight

Ethereum's moment has arrived—again. As crypto products smash inflow records this July, all eyes lock onto ETH's simmering demand.

Why ETH? Because institutional money flows don't lie. While Bitcoin ETFs hog headlines, smart money quietly stacks Ethereum—the only blockchain with real-world utility beyond 'digital gold' posturing.

The cynical take? TradFi finally noticed crypto's plumbing actually works. Now watch them overcomplicate it with structured products and synthetic derivatives.

Ether products clearly saw the most attention last week as money trickled out of bitcoin vehicles. US ETH ETFs brought in another $157 million on Monday.

It seems to be the institutional demand progression we’ve heard about for years. BTC has the largest market cap. It gets the headlines. The narrative around BTC is a bit simpler and intuitive, attracting capital. It’s digital gold, yada yada.  

But ethereum has become hard to ignore, particularly after the GENIUS Act became law. 

Competition among institutions that now have a path to issue stablecoins (by registering with the OCC) is set to speed up adoption in the US, noted ZX Squared Capital co-founder CK Zheng. That will disrupt the existing payment infrastructure with faster and cheaper processes built on blockchain technology. 

“Given most of the stablecoins are built on [Ethereum], the demand from the institutional investors for ETH will grow exponentially for the foreseeable future,” Zheng told me. “We expect ETH price to hit $10,000 during this bull market run.”

ETH was trading around $3,750 at 1 p.m. ET Tuesday — up 54% from a month ago. 

Even with the narrative for ETH (as the platform for stablecoins) being stronger than ever, it remains “a catch-up trade.” For those keeping score at home, BTC has the edge over ETH on YTD returns, +26% to +12.5%. 

As the chart further up shows, $860 million has flowed into solana and XRP products this month as well. 

Whether or not we’re entering an “altcoin season” is a question with an “inconclusive” answer, according to CoinShares research head James Butterfill.

“These altcoin inflows may be driven less by broad-based enthusiasm and more by anticipation surrounding potential US ETF launches,” Butterfill wrote.

It’s worth noting too that, on the corporate crypto treasury strategy front, some are buying altcoins directly. 

Mill City Ventures revealed a $450 million private placement on Monday to kick off efforts to make sui — the native token of the layer-1 Sui blockchain — its primary treasury reserve asset.  

London-based hedge fund Karatage Opportunities and SUI Foundation were the biggest investors. The company intends to use ~98% of the proceeds to buy SUI and ~2% to fund its short-term lending business. 

Also on Monday, CEA Industries said it looks to build the world’s largest publicly listed BNB Chain treasury strategy. BNB’s market cap of ~$115 billion is the fifth-largest among cryptos.

The current lack of US ETFs holding altcoins boosts interest in these companies to access token exposure in a traditional brokerage account, said Grayscale research head Zach Pandl.  

As more crypto ETPs become available, he told me, demand for altcoin treasury companies may diminish. He expects those ETP launches later this year. 

“Regardless of the product wrapper, institutional investors are likely to focus on the altcoins with sustainable revenue,” Pandl added. “In traditional finance, the ‘revenue meta’ never goes away.”

Zheng noted that it could take years before institutional investors get comfortable to take risks in this space — beyond BTC and ETH.  

“It may require regulatory clarity around the entire crypto ecosystem as well as a clear narrative for a specific coin that has an eye-catching application with strong fundamentals,” he explained. 

While we expect more clarity, the market will decide what applications catch their eye. As with most things, time will tell.

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