A Potential Outperformance in 2025
According to recent data, net inflows into Ether exchange-traded funds (ETFs) are gaining momentum and could outperform Bitcoin (BTC) ETFs in 2025. As of December 16th, Ethereum (ETH) ETFs have seen seven consecutive weeks of net inflows, including a record-breaking $2.2 billion in the week of November 26th.
Historical Inflows Data
| Date | Net Inflows (USD) |
| — | — |
| Nov 19 – Nov 26 | $1.8 billion |
| Nov 27 – Dec 3 | $2.2 billion |
Source: CoinShares
These numbers indicate a significant increase in investor interest in Ethereum ETFs, and analysts expect this trend to continue into 2025.
Analysts’ Predictions
Nate Geraci, President of The ETF Store, predicts that the current net inflows pace will accelerate. "Net inflows into ETH ETFs are currently on pace with gold ETFs, but I expect inflows to accelerate from here," he said in a December 20th post on X.
Price Outperformance
Since November, Ethereum has outperformed Bitcoin in both crypto spot and derivatives markets, according to a December report by Bybit. This price performance could further enhance ETF returns, leading to increased investor interest.
Why Ethereum’s Performance is Undervalued
Matt Hougan, Bitwise’s Head of Research, believes that sustained growth in network activity, including from the proliferation of artificial intelligence agents, will propel Ether’s performance. "Ethereum and Base, an Ethereum layer-2 scaling network, are where many AI agents are currently operating," he told Cointelegraph in a December 19th interview.
AI Adoption on Ethereum
- "A lot of people assume it’s happening on Solana. Actually, a lot of it is happening in the ETH ecosystem… I’m bullish on both, but I think ETH is underestimated in this regard."
- Hougan’s comments highlight the significant potential for Ethereum to benefit from AI adoption.
VanEck Estimates Ether’s Spot Price
Asset manager VanEck estimates that Ethereum’s spot price will reach $6,000 by the fourth quarter of 2025. This prediction is based on their estimate that the Ethereum network will generate up to $66 billion in annual free cash flow by 2030.
Staking in ETFs
United States-based Ether ETFs may soon feature staking yield, according to Bernstein Research’s December report. Staking involves locking up ETH as collateral with a validator on the Ethereum network, earning ETH payouts from network fees and other rewards but risking "slashing" – or losing their ETH collateral – if the validator misbehaves.
Staking Returns
As of December 20th, staking Ether earns roughly 3.35% in annualized percentage returns (APR), denominated in ETH, according to Staking Rewards.
Potential Regulatory Approval
On December 19th, the US Securities and Exchange Commission simultaneously approved two ETFs comprising a market-weighted index of BTC and ETH. This development could provide another potential avenue to boost ETH fund inflows.
Investment Opportunities
The increasing interest in Ethereum ETFs presents investors with opportunities to capitalize on this trend. By understanding the factors driving net inflows into these funds, investors can make informed decisions about their investment portfolios.
Conclusion
Net inflows into Ethereum ETFs are gaining momentum and could outperform Bitcoin ETFs in 2025. Analysts’ predictions, combined with Ethereum’s price performance and potential regulatory approval of staking yield in ETFs, create a favorable environment for continued growth in investor interest. As the crypto market continues to evolve, investors should remain vigilant about new investment opportunities arising from this trend.
Market Outlook
The increasing demand for Ethereum ETFs is driven by several factors, including:
- Price performance: Ethereum’s outperformance of Bitcoin in both spot and derivatives markets has drawn attention from investors.
- Network growth: The proliferation of artificial intelligence agents operating on the Ethereum network could further propel Ether’s performance.
- Regulatory developments: Potential approval of staking yield in ETFs and the simultaneous approval of two BTC-ETH index ETFs by the US SEC create opportunities for increased investor interest.
Investment Strategies
To capitalize on this trend, investors can consider the following strategies:
- Diversification: Spread investments across various asset classes to minimize risk.
- Research: Stay informed about regulatory developments and market trends affecting Ethereum ETFs.
- Long-term perspective: Adopt a long-term investment approach to weather market fluctuations.
Disclaimer
This article is for informational purposes only. It is not intended as investment advice or recommendations. Investors should conduct their own research before making any investment decisions.
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