Digital Currency Investment Products Recover - Ethereum Investment Vehicles Outperform Bitcoin Ones
Headline: Ethereum ETFs Experience $2.9 Billion Weekly Inflows Amidst Institutional Demand and Capital Rotation
Ethereum Exchange-Traded Funds (ETFs) have seen a surge in inflows, totalling approximately $2.9 billion in a single week of 2025. This influx forms part of a broader trend of strong institutional demand, with Ethereum ETFs reporting weekly inflows of around $268 million for the year.
The surge in Ethereum ETF inflows can be attributed to several key factors. Institutional staking and regulatory clarity, particularly the SEC’s self-custodial staking exemption, has enabled new on-chain yield vehicles like Digital Asset Treasuries (DATs). These provide institutions with yield opportunities beyond traditional ETFs.
Moreover, Ethereum's price appreciation, which saw a rise of around 12-16% in August 2025, has been driven by staking demand, Layer-2 scaling adoption, and the dominance of large players like BlackRock, who control 78% of the Ethereum ETF market share.
Another significant factor is the market capital rotation from Bitcoin to Ethereum. During this period, Ethereum ETF inflows vastly outpaced Bitcoin’s, with Ethereum ETFs absorbing $2.9 billion out of $3.75 billion in total crypto ETF inflows, whereas Bitcoin only attracted $552 million.
The expansion of Ethereum's DeFi infrastructure and stablecoin supply growth has also reinforced its ecosystem's critical role. Anticipation of macroeconomic factors like expected Federal Reserve rate cuts could boost crypto risk appetite and support inflows.
In contrast, Bitcoin, despite reaching an all-time high near $124,000 earlier in 2025, experienced less ETF inflow and even slightly negative monthly returns around the same time. Bitcoin’s dominance slipped marginally from 60% to 59%, while Ethereum’s dominance jumped from 8% to 14%, indicating a clear capital rotation towards Ethereum.
Active addresses for Ethereum are at the highest level since early 2021, while transaction counts and total value staked also hit all-time highs. Ethereum's market capitalization is one-fifth of Bitcoin's.
The inflows came after significant early-week turbulence, with Ethereum ETFs leading digital asset funds with $268 million in weekly inflows. Total assets under management for Ethereum reached an all-time high of $32.6 billion.
Traders are now focusing on Tuesday's U.S. CPI report, with digital asset products posting $572 million in combined weekly flows. Bitcoin briefly surpassed $122,000, but as of now, it is trading at $120,104, up 1.3% in the last 24 hours.
Ethereum funds are drawing attention due to their role in areas like DeFi, tokenized assets, and staking-sectors. Mal Zane, regional director at CoinEx, stated that many large investors see Ethereum as more than just a higher-risk trade on the crypto market.
Early in the week, there were $1 billion in combined outflows from digital asset funds, but this was followed by the $1.57 billion surge in inflows triggered by President Donald Trump signing an executive order allowing crypto assets in 401(k) retirement plans.
In summary, the $268 million weekly inflows for Ethereum ETFs in 2025 reflect institutional demand fueled by staking rewards, regulatory approvals, ecosystem growth, and capital rotation away from Bitcoin ETFs, which saw comparatively weaker inflows during the same period.
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