Ether exchange-traded funds (ETFs) experienced a surge in popularity in December 2024, recording over $2.6 billion in net inflows for the month. Despite this impressive growth, Ether ETFs still lag behind Bitcoin ETFs, which ended the year with over $35 billion in net inflows, according to data from Farside Investors.
Ether ETFs See Record Growth in Late 2024
The last two months of 2024 marked a strong period for Ether ETFs, which saw eight consecutive weeks of net inflows. A record-breaking $2.2 billion flowed into Ether ETFs during the week of November 26, as reported by CoinShares. Analysts believe this momentum could continue into 2025, especially if Ether’s price outpaces Bitcoin and regulatory changes enable ETFs to generate yields from Ethereum staking.
Leading Ether Funds
Several major asset managers drove the growth of Ether ETFs in 2024:
- BlackRock’s iShares Ethereum Trust (ETHA): Led the market with $3.5 billion in net inflows.
- Fidelity Ethereum Fund (FETH): Secured second place, recording $1.5 billion in net inflows.
These gains, however, were partially offset by significant outflows from Grayscale’s Ethereum Trust (ETHE), which saw $3.6 billion in net outflows. Grayscale’s ETHE, which launched in 2017 as a non-listed trust, charges a 1.5% management fee. In July 2024, Grayscale introduced the Ethereum Mini Trust as a lower-cost alternative to attract investors.
Bitcoin ETFs followed a similar trend. BlackRock’s iShares Bitcoin Trust (IBIT) dominated the market with $37 billion in net inflows, while Grayscale’s Bitcoin Trust (GBTC) recorded over $20 billion in outflows, highlighting a shift toward newer, more cost-efficient ETF options.
Can Ether ETFs Overtake Bitcoin ETFs in 2025?
Several factors could enable Ether ETFs to outperform their Bitcoin counterparts in the coming year.
- Market Performance: Since November 2024, ETH has consistently outperformed BTC in spot and derivatives markets, according to Bybit.
- Staking Yields: If regulators permit ETFs to incorporate staking yields, Ether ETFs could gain a competitive edge by offering higher returns.
- Network Activity: Ethereum’s expanding ecosystem, including its layer-2 network Base, has become a hub for artificial intelligence agents. This increasing activity may boost demand for Ether, according to Matt Hougan, head of research at Bitwise.
However, competition remains fierce. Solana, another layer-1 blockchain, outperformed Ethereum in 2024, making it a potential rival in the crypto ETF market.
Asset manager VanEck predicts Ethereum’s spot price could soar to $6,000 by the fourth quarter of 2025. This price growth, combined with increasing ETF inflows and staking rewards, could position Ether ETFs as strong contenders against Bitcoin ETFs in the near future.
