Ethereum has recently experienced a significant price surge, marking a 37% increase over the past week. This comes in the wake of Bitcoin’s all-time high rally. The momentum in Ethereum is largely fueled by substantial inflows into spot Ethereum ETFs, bringing renewed attention to the second-largest cryptocurrency.
Ethereum's price jump of more than 35% over the week has positioned it closer to Bitcoin’s performance. The broader digital assets market has received a boost from Donald Trump’s unexpected victory in the 2024 US presidential election. However, specific factors aiding Ethereum’s rise include remarkable inflows into its ETFs. Notably, on November 11, US-based spot ETH ETFs witnessed a record $295 million in daily inflows, surpassing the prior peak of $106 million recorded at launch in July 2024. According to SoSoValue, Fidelity’s FETH ETF led these inflows, attracting $115.48 million, followed by BlackRock’s ETHA, Grayscale’s ETH, and Bitwise’s ETHW with $101.11 million, $63.32 million, and $15.57 million, respectively.
As it stands, the total assets held in these ETFs amount to $9.72 billion, constituting over 2.41% of Ethereum’s market capitalization. Meanwhile, cumulative net outflows total $41.30 million.
Market participants highlight a resurgence of institutional interest in Ethereum ETFs due to these inflows, positively impacting ETH’s market performance. Throughout much of 2024, Ethereum has lagged against major cryptocurrencies. However, the remaining months of the year could present opportunities for a reversal in ETH’s fortunes. Insights from Leon Waidmann, Head of Research at Onchain Foundation, reveal that ETH staking is at an all-time high. Concurrently, the supply of ETH on exchanges is dwindling, indicating a potential supply squeeze that could spark a notable price rally.
Further supporting Ethereum's prospects is the recovery in the ETH/BTC trading pair, which improved from 0.034 to 0.040, before slightly retreating to 0.037. A breakout above the 0.040 resistance level could drive additional gains for ETH over BTC. Currently, Ethereum’s price remains approximately 32% below its all-time high of $4,878 set in November 2021.
Moreover, Ethereum's decentralized finance (DeFi) sector is exhibiting renewed vigor, as reported by DefiLlama. TVL across Ethereum-based DeFi protocols has surged to $62.36 billion, a notable increase from November 2023’s $24 billion.
Over half of this value is concentrated in Lido, an ETH staking platform with nearly $33 billion, followed by Aave and EigenLayer, with $15.21 billion and $14.57 billion, respectively. Despite these positive developments, concerns persist regarding Ethereum’s “ultrasound money” narrative due to its high issuance rate. At the time of reporting, ETH trades at $3,291, representing a 3.1% increase over the past 24 hours.