Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth
Main Idea
Ethereum ETFs have seen significantly higher inflows compared to Bitcoin ETFs, driven by hedge funds utilizing basis trades and spot demand, potentially supporting further price growth towards $4,000.
Key Points
1. Ethereum ETFs recorded $1.85 billion in weekly net inflows, 25 times higher than Bitcoin ETFs, with BlackRock’s ETHA holding over $10 billion in assets.
2. Hedge funds are capitalizing on the CME ETH basis trade, buying spot ETH ETFs and shorting ETH futures to exploit a 12% annualized price spread.
3. Despite record inflows, the ETH/BTC ratio has remained flat, indicating muted altcoin momentum and suggesting short-term arbitrage rather than long-term capital rotation.
4. Spot demand for Ethereum is growing, driven by institutional interest in higher returns from basis trades compared to staking yields, with potential for ETH to test $4,000.
5. The CME ETH basis trade, involving spot ETF purchases and futures shorting, has become a key driver of institutional inflows and market activity.
Description
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