As the year draws to a close, analysts are painting an optimistic picture for the future of Ether (ETH) exchange-traded funds (ETFs). With net inflows gaining momentum and a strong spot ETH price performance on the horizon, many experts predict that ETH ETFs will outperform their Bitcoin (BTC) counterparts in 2025.
Seven Straight Weeks of Net Inflows
As of December 16th, Ether ETFs have seen seven consecutive weeks of net inflows. This includes a record-breaking $2.2 billion influx during the week of November 26th, according to data from CoinShares. Analysts are optimistic that this uptrend will continue into 2025.
Accelerating Inflows
Nate Geraci, president of The ETF Store, expects inflows to accelerate in the coming year. "Net inflows into ETH ETFs are currently on pace with gold ETFs," he noted, "but I expect inflows to accelerate from here." This sentiment is echoed by other analysts who predict that strong spot ETH price performance will enhance ETF returns and regulators will allow funds to generate yields from staking.
Price Outperformance
Since November, Ether has outperformed Bitcoin in both crypto spot and derivatives markets. According to a December report by Bybit, a leading cryptocurrency exchange, this price differential is expected to continue.
Meanwhile, BTC ETFs saw their biggest net outflows ever on December 19th. This significant exodus of funds from BTC ETFs could further propel Ether’s performance.
Ethereum’s Unsung Hero
Matt Hougan, Bitwise’s head of research, attributes Ethereum’s underperformance in 2024 to its relatively low profile in the AI agent space. "Many people assume it’s happening on Solana," he told Cointelegraph. However, according to Hougan, a significant portion of AI activity is taking place within the ETH ecosystem.
Ethereum Layer-2 Scaling Network
Hougan highlighted Base, an Ethereum layer-2 scaling network, as an area where many AI agents are currently operating. "I’m bullish on both Solana and ETH," he noted, "but I think ETH is underestimated in this regard."
Asset Manager Predicts $6,000 Spot Price by Q4 2025
VanEck estimates that Ether’s spot price will reach $6,000 by the fourth quarter of 2025. This prediction is based on the asset manager’s expectation that the Ethereum network will generate up to $66 billion in annual free cash flow by 2030.
Staking and ETFs: A New Avenue for Growth
United States-based Ether ETFs may soon feature staking yield, according to Bernstein Research. Staking involves locking up ETH as collateral with a validator on the Ethereum network. Stakers earn ETH payouts from network fees and other rewards but risk "slashing" or losing their ETH collateral if the validator misbehaves.
As of December 20th, staking Ether earns roughly 3.35% in annualized percentage returns (APR) denominated in ETH, according to Staking Rewards.
Regulatory Approval: A Catalyst for Growth
On December 19th, the US Securities and Exchange Commission simultaneously approved two ETFs comprising a market-weighted index of BTC and ETH. This development creates another potential avenue to boost ETH fund inflows.
In conclusion, with net inflows into Ether ETFs gaining momentum and a strong spot ETH price performance on the horizon, analysts predict that ETH ETFs will outperform their Bitcoin counterparts in 2025. As regulatory approval for staking yield in US-based Ether ETFs approaches, investors should keep a close eye on this burgeoning market.
Timeline:
- 2024: Ethereum’s underperformance due to relatively low profile in AI agent space
- November 26th: Record-breaking $2.2 billion influx into Ether ETFs
- December 16th: Seven consecutive weeks of net inflows into Ether ETFs
- 2025: Analysts predict strong spot ETH price performance and outperformance of ETH ETFs compared to BTC ETFs
Key Players:
- Nate Geraci, President of The ETF Store: Expecting accelerating inflows into Ether ETFs
- Matt Hougan, Bitwise’s Head of Research: Bullish on both Solana and ETH
- VanEck Asset Manager: Predicts $6,000 spot price by Q4 2025
- Bernstein Research: Expects regulatory approval for staking yield in US-based Ether ETFs
