According to data from Farside Investors, Ether exchange-traded funds (ETFs) have seen a surge in popularity, surpassing $2.6 billion in net inflows for the month of December. This marks an impressive milestone for the Ethereum-based funds, which are gaining traction against their Bitcoin-based counterparts.
A Record-Breaking Week for Ether ETFs
In November and December, Ether ETFs experienced eight consecutive weeks of net inflows, including a record-breaking $2.2 billion in the week of November 26. This significant influx of capital into Ether ETFs has been attributed to various factors, including the growing adoption of Ethereum as a decentralized platform.
Comparison with Bitcoin ETFs
While Ether ETFs have gained significant traction, they still lag behind their Bitcoin-based counterparts. According to Farside Investors, Bitcoin ETFs closed out 2024 with over $35 billion in net inflows. However, analysts predict that this trend may reverse in 2025, especially if ETH’s price performance enhances ETF returns and regulators allow the funds to generate yields from staking.
Top Ether Funds
Among the top-performing Ether funds are BlackRock’s iShares Ethereum Trust (ETHA) and Fidelity Ethereum Fund (FETH). According to Farside Investors, ETHA led the pack with over $3.5 billion in 2024 net inflows, while FETH followed closely with $1.5 billion in net inflows.
Grayscale’s ETHE: A Cheaper Alternative?
However, Grayscale Ethereum Trust (ETHE) experienced significant net outflows of over $3.6 billion in 2024. This can be attributed to the launch of Grayscale’s cheaper alternative, the Grayscale Ethereum Mini Trust, in July. Grayscale’s ETHE charges management fees of 1.5%, which may have contributed to its decline in popularity.
Will Ether Outperform Bitcoin ETFs in 2025?
Since November, ETH has outperformed BTC in crypto spot and derivatives markets, according to a December report by Bybit, a crypto exchange. This trend suggests that Ether’s performance may improve in the coming year, potentially surpassing its rival layer-1 network Solana.
Sustained Growth and AI Agents
According to Matt Hougan, Bitwise’s head of research, sustained growth in network activity, including from the proliferation of artificial intelligence agents, could further propel Ether’s performance. Ethereum and Base, an Ethereum layer-2 scaling network, are currently operating hubs for many AI agents, which may contribute to Ether’s improving performance.
Asset Manager VanEck’s Prediction
Asset manager VanEck estimates that Ether’s spot price will reach $6,000 by the fourth quarter of 2025. This prediction suggests that investors should keep a close eye on Ether’s potential for growth in the coming year.
Conclusion
In conclusion, Ether ETFs have seen significant gains in popularity, surpassing $2.6 billion in net inflows for December. While they still lag behind Bitcoin ETFs, analysts predict that this trend may reverse in 2025, especially if ETH’s price performance enhances ETF returns and regulators allow the funds to generate yields from staking.
Recommendations
For investors considering investing in Ether-based funds, it is essential to keep a close eye on market trends and regulatory developments. With sustained growth in network activity and improving performance, Ether may outperform its rival layer-1 network Solana in 2025.
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