Ethereum exchange-traded funds (ETFs) are seeing a dramatic turnaround in investor sentiment, marking a stark contrast to the rocky start they faced upon their launch this summer. Analysts are attributing this resurgence to renewed optimism in the crypto market following the U.S. presidential election.
Cumulative net inflows for spot Ethereum ETFs turned positive earlier this week, reaching $94 million on Tuesday and climbing further to $238 million by Thursday, according to SoSo Value data. This comes after a challenging debut period in July, during which products like the Grayscale Ethereum Trust (ETHE) hemorrhaged $1.7 billion in outflows within just five trading days, as Ethereum’s price dipped to $3,400.
The initial outflows were linked to ETHE’s relatively high expense ratio, which made it less appealing compared to alternatives. Broader macroeconomic concerns, such as disruptions in global markets, also weighed on Ethereum’s performance. However, sentiment has shifted significantly in recent days.
Matt Mena, a research analyst at 21Shares, explained that the timing of the initial Ethereum ETF launches was less than ideal, but the current wave of optimism has reinvigorated investor interest. This revival coincided with Donald Trump’s presidential victory, which has fueled expectations of a more crypto-friendly regulatory landscape.
The optimism has translated into record-setting inflows. Over six consecutive days, beginning on Election Day, investors allocated $796 million to Ethereum ETFs—the largest and longest stretch of inflows on record. Analysts see this as a sign of growing confidence in Ethereum’s potential, both as a platform for innovation and as a resilient digital asset.
Chris Yin, CEO of Plume, highlighted the broader implications of this shift, noting that a pro-crypto administration could bolster the development of applications on Ethereum and validate the asset’s use cases. FalconX Head of Research David Lawant echoed this sentiment, pointing to the regulatory framework for stablecoins as a potential catalyst for Ethereum’s adoption.
The recent momentum may also reflect spillover interest from Bitcoin ETFs, which have seen billions of dollars in inflows since Trump’s win. Lawant suggested that Ethereum, as the second-largest cryptocurrency and the only other asset with an approved spot ETF, is a natural next step for both institutional and retail investors exploring the crypto space.
Ethereum’s price performance has mirrored the ETF inflows. It surged from $2,400 on Election Day to a peak of $3,400 earlier this week before settling around $3,100. This reflexivity—where rising prices drive further investment—has likely played a role in boosting Ethereum ETFs.
While ETHE’s initial struggles overshadowed the broader market, analysts argue the overall launch of Ethereum ETFs has been a success. Collectively, these funds have attracted $3.5 billion in less than four months—a strong showing for a nascent market.
As optimism continues to grow, Ethereum ETFs appear poised to benefit from a favorable regulatory environment, increasing institutional interest, and a maturing crypto market. For investors, this marks a pivotal moment for Ethereum’s integration into traditional finance.