Record inflows into ETH Exchange-Traded Funds (ETFs), exceeding daily Ethereum network issuance by over 100 times

Record inflows into ETH Exchange-Traded Funds (ETFs), exceeding daily Ethereum network issuance by over 100 times

In a significant shift for the cryptocurrency market, the demand for Ethereum Exchange-Traded Funds (ETFs) has surged, outpacing the rate of new Ethereum (ETH) entering circulation. This trend is particularly noticeable in the US, where Ethereum spot ETFs have experienced record-breaking inflows in recent months.

On July 16, US-listed spot Ethereum ETFs saw their biggest day of inflows yet, with over $726 million worth of ETH - more than 200,000 coins - being invested. BlackRock's ETHA product brought in the most inflows on that day, with $499 million, followed by Fidelity's FETH with $113 million. Since launching in July 2024, spot Ethereum ETFs have attracted a total of about $6.5 billion.

This surge in demand is largely driven by institutional investors, with notable contributions from Grayscale's Ethereum Trust and Bitwise’s ETHW ETF. The approval of Ethereum spot ETFs in the US nearly a year ago has provided a convenient way for traditional investors to gain exposure to Ethereum without directly managing digital assets.

Meanwhile, the amount of new ETH coming into circulation is determined by the network's consensus mechanism and mining or staking rewards. Ethereum transitioned from proof-of-work (PoW) to proof-of-stake (PoS) with "The Merge" in September 2022. Since then, the network issues new ETH primarily as staking rewards for validators, which typically averages around 5% annualized for validators. However, the exact amount of new ETH introduced into circulation since July 2024 could not be determined from the available data.

The imbalance between the robust demand for Ethereum ETFs and the relatively steady new ETH supply can potentially support higher prices for Ethereum. As more investors seek to gain exposure through traditional financial instruments like ETFs, the demand for Ethereum could continue to outpace its supply.

Interestingly, this surge in Ethereum demand comes at a time when a Bitcoin-focused firm, BitMine Immersion, has recently pivoted to Ethereum. BitMine Immersion announced that its Ethereum treasury holdings have reached $1 billion, with the firm planning to stake enough ETH to control around 5% of the total ETH supply. If BitMine were to buy 6 million ETH (5% of the total supply), it would require around $20.4 billion. At current prices, the annual earnings from staking 6 million ETH would be around $660 million.

The pivot to Ethereum by BitMine Immersion was not the only notable change. The firm also attracted a 9.1% passive stake from Founders Fund and appointed Fundstrat's Tom Lee as the chairman of the board. BitMine currently holds over 300,000 ETH, purchased at an average price of $3,461.89 per ETH.

The ETH/BTC ratio has also surged to ₿0.02884, the highest level since February 2025, suggesting that one Ethereum is worth more compared to one Bitcoin than it has been in over a year. While Bitcoin ETFs have pulled in $53.8 billion since they started trading in January 2024, the demand for Ethereum ETFs seems to be gaining momentum.

As of press time, there are approximately 120.7 million ETH in circulation, with the network's issuance rate remaining relatively steady due to its more controlled issuance model following the transition to PoS. The continued demand for Ethereum ETFs and the strategic moves by firms like BitMine Immersion indicate a promising future for Ethereum in the traditional financial market.

Technology plays a significant role in the surging demand for Ethereum Investing, as conventional investors are increasingly attracted to Ethereum Exchange-Traded Funds (ETFs) as a means to gain exposure to Ethereum without directly managing digital assets. For instance, the company BitMine Immersion, traditionally focused on Bitcoin, recently pivoted to Ethereum, holding over 300,000 ETH and planning to stake enough to control around 5% of the total ETH supply, demonstrating the growing interest in Ethereum within the realm of finance and technology.

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