Net inflows into Ether (ETH) exchange-traded funds (ETFs) are gaining momentum and could outperform Bitcoin (BTC) ETFs in 2025, analysts say.
As of Dec. 16, Ether ETFs have seen seven straight weeks of net inflows, including a record-breaking $2.2 billion in the week of Nov. 26, according to data from CoinShares.
Analysts expect this uptrend to continue into 2025, especially if strong spot ETH price performance enhances ETF returns and regulators allow the funds to generate yields from staking.
Net inflows into ETH ETFs are “currently on pace w/ gold [ETFs], but I expect inflows to accelerate from here,” Nate Geraci, president of The ETF Store, said in a Dec. 20 post on the X platform.
Source: Nate Geraci
Price outperformance
Since November, ETH has outperformed BTC in crypto spot and derivatives markets, according to a December report by Bybit, a crypto exchange. Meanwhile, BTC ETFs saw the biggest net outflows ever on Dec. 19.
Sustained growth in network activity, including from the proliferation of artificial intelligence agents, could further propel Ether’s performance, which has lagged rival layer-1 network Solana (SOL) in 2024, Matt Hougan, Bitwise’s head of research, told Cointelegraph.
Ethereum and Base, one of Ethereum’s layer-2 scaling networks, are “where many AI agents are currently operating,” Hougan told Cointelegraph in a Dec. 19 interview.
“[A] lot of people assume it’s happening on Solana. Actually, a lot of it is happening in the ETH ecosystem […] I’m bullish on both, but I think ETH is underestimated in this regard."
Meanwhile, asset manager VanEck estimates Ether’s spot price will reach $6,000 by the fourth quarter of 2025.
The asset manager expects the Ethereum network to generate up to $66 billion in annual free cash flow by 2030, driving spot ETH’s price as high as $22,000.
Source: Stakingrewards.com
Staking in ETFs
US-based Ether ETFs may soon feature staking yield, Bernstein Research said in a December report.
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 ETH collateral — if the validator misbehaves.
As of Dec. 20, staking Ether earns roughly 3.35% in annualized percentage returns (APR), denominated in ETH, according to StakingRewards.com.
“On ETH staking, I think it’s a reasonable bet that we’ll see it investigated and potentially applied in the ETF space” in the US, Hougan said.
On Dec. 19, the US Securities and Exchange Commission (SEC) simultaneously approved two ETFs comprising a market-weighted index of BTC and ETH, creating another potential avenue to boost ETH fund inflows.
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