Ether attracts significant investment interest this month as U.S.-listed spot ETFs see considerable inflows, contrasting with outflows in Bitcoin ETFs.
The early-month price correction of Ether (ETH) to $2,000 did not deter investors, as evidenced by substantial growth in U.S.-based spot ETF inflows. Data from Farside Investors highlights that the nine ether spot exchange-traded funds (ETFs) have cumulatively attracted $393 million in net inflows over the past month.
This influx, reported by Glassnode, marks a sevenfold increase compared to inflows observed in January and is accompanied by outflows on only two trading days.
Conversely, the 11 bitcoin ETFs recorded a net outflow of $376 million during the same period, with inflows on just four days, indicating tepid investor interest. The shift toward Ether investment is partly rooted in carry trading strategies, where traders purchase spot ETFs and short ETH CME futures simultaneously. Additionally, some investors may adopt a bullish stance by directly investing in ether ETFs.
Despite increased investment in Ether, this trend has yet to result in significant upward price movement for the cryptocurrency. ETH, the backbone of Ethereum's smart contract blockchain, has traded steadily between $2,600 and $2,800 following the price drop on February 3. Similarly, Bitcoin remains confined below the $100,000 threshold amid volatile movements in memecoins.
However, some market analysts anticipate potential price growth for Ether due to Ethereum's upcoming Pectra upgrade. Scheduled for April 8, this upgrade aims to enhance the execution and consensus layers of Ethereum, positioning it to compete more effectively with Layer 1 alternatives like Solana.
"ETH is poised for a potential comeback," stated Nick Forster, founder of the decentralized options platform Derive.xyz, in an email. "The Pectra upgrade introduces network improvements, including faster transactions and optimized staking mechanics."
Forster further highlighted Ethereum founder Vitalik Buterin's initiative for a tenfold increase in the Layer 1 gas limit, suggesting advancements in application development and security. Additionally, the Ethereum Foundation's recent $120 million investment in DeFi projects underscores growing institutional interest, facilitated by ETHrealize. Led by Vivek Raman, ETHrealize seeks to bridge traditional finance entities with the blockchain ecosystem.
According to Forster, "There's currently a 30% likelihood that ETH will surpass $3,000 by the end of the quarter, an increase from last week's 28% probability."
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.