Ethereum ETF Inflows Surge Past Bitcoin as Hedge Funds Drive Basis Trade and Spot Demand May Support Further Growth

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.