Ethereum (ETH) appears to be emerging from its prolonged period of stagnation, experiencing a substantial near-37% surge over the past week following Bitcoin’s (BTC) record-breaking rally. The second-largest cryptocurrency, with a market cap of approximately $404 billion, is now gaining ground on Bitcoin, with its ETH token jumping more than 35% recently.
This surge isn’t happening in a vacuum. While the broader digital assets market has been buoyed by Donald Trump’s unexpected victory in the 2024 US presidential election, there are additional factors driving Ethereum’s rise. A significant data point highlighting this trend is the substantial inflow of funds into spot ETH ETFs. November 11 saw a record $295 million in daily inflows into US-based spot ETH ETFs, marking the highest amount recorded to date.
For context, the previous peak for daily inflows into spot ETH ETFs stood at $106 million, recorded on the first day these ETFs launched in July 2024. Leading the influx was Fidelity’s FETH ETF, drawing in $115.48 million. Following closely were BlackRock’s ETHA with $101.11 million, Grayscale’s ETH with $63.32 million, and Bitwise’s ETHW with $15.57 million. The total value of assets held across various spot ETH ETFs is currently $9.72 billion, representing just over 2.41% of Ethereum’s market cap. Meanwhile, cumulative net outflows from all spot ETH ETFs amount to $41.30 million.
The resurgence in institutional interest in Ethereum ETFs amid these record inflows seems to be boosting ETH’s price action. For much of 2024, ETH’s price performance lagged behind major cryptocurrencies like Bitcoin and Solana (SOL). However, Q4 2024 appears promising for a significant uptick in ETH’s momentum. Leon Waidmann, Head of Research at Onchain Foundation, pointed to record-high ETH staking levels and low token reserves on crypto exchanges as evidence of a potential supply squeeze. This combination could trigger a substantial rally for ETH.
Additionally, the ETH/BTC ratio, after a period of decline, seems to be making a comeback. The trading pair has risen from 0.034 to 0.040 before dipping slightly to 0.037 at the time of writing. A successful breakout at the next major resistance level around 0.040 could result in further gains for ETH over Bitcoin. Currently, ETH remains about 32% below its all-time high of $4,878 recorded in November 2021.
Moreover, Ethereum’s decentralized finance (DeFi) activity is gaining momentum. DefiLlama data shows that the total value locked (TVL) across Ethereum-based DeFi protocols stands at $62.36 billion, up significantly from about $24 billion in November 2023. More than half of this TVL is tied to the ETH staking platform Lido, which holds close to $33 billion. Lido is trailed by DeFi lending protocol Aave with $15.21 billion and EigenLayer with $14.57 billion.
However, concerns over Ethereum’s “ultrasound money” narrative persist due to the high issuance rate of the token. As of now, ETH trades at $3,291, reflecting a 3.1% increase in the past 24 hours.
