Recently, Ethereum (ETH) has once again become the market focus. On-chain data shows that giants like BlackRock and Fidelity are accelerating their accumulation of Ethereum, with over $500 million flowing into ETH ETFs in the past few days, boosting ETF trading volume and drawing market attention to Ethereum.

1. Record-breaking Fund Inflows: Significant Recovery in the ETH ETF Market

On-chain Data Overview:

  • Since November 21, Ethereum ETFs have maintained net inflows almost daily, with trading volume reaching an all-time high in the past week, attracting $1.29 billion in funds.

  • The assets under management (AUM) of BlackRock's ETHA fund have expanded to $3.55 billion, while Fidelity's ETH ETF has grown to $1.56 billion.

This trend indicates that the investment demand for Ethereum ETFs is significantly growing. Especially as the recent ETH price approaches $4,000, the recovery in spot purchases and the surge in ETF fund inflows are forming a positive feedback loop.

2. Giants 'Running into the Market': Surge in ETH Holdings

The recent active operations of BlackRock and Fidelity have further solidified Ethereum's market position:

BlackRock:

  • The number of known on-chain ETH wallets has exceeded 820,000, with an obvious acceleration in fund inflow.

  • This trend is remarkably similar to the frenzy seen during the initial launch of ETH ETFs in the summer of 2024.

Fidelity:

  • The number of ETH held has increased to 114,630 ETH, aligning with the continued breakthroughs in the Ethereum market.

Grayscale:

  • Despite BlackRock and Fidelity's rapid pursuit, Grayscale remains the largest holder of ETH, with its Ethereum trust holding $5.56 billion worth of ETH.

The proactive layouts of these giants indicate they are preparing for a potential bull market in 2025 while attracting traditional investors to join this wave.

3. ETH Staking ETF: The Next Step in Innovation?

The staking feature of Ethereum adds a unique allure to its ETFs:

The Possibility of Staking:

  • ETH can generate passive income through staking; however, current ETF products mainly passively hold ETH due to asset liquidity requirements and have not ventured into the staking domain.

  • There are market views suggesting that ETF products allowing staking may emerge in the future for higher returns.

Challenges and Risks:

  • Staking involves longer lock-up periods and potential risks of hacking or vulnerabilities.

  • The conservative nature of ETFs means they primarily focus on attracting traditional funds, temporarily avoiding excessive participation in DeFi or other on-chain activities.

Potential Impact:

  • Even so, the scarcity brought about by the Ethereum network due to staking, liquidity locking, and the fee-burning mechanism (EIP-1559) may further drive up the price of ETH.

4. Declining Inflation and Supply Scarcity: Strengthening ETH's Monetary Attributes

Ethereum's supply dynamics further solidify its status as a 'stable currency':

  • The ETH inflation rate has dropped from 0.6% to 0.12%, significantly reducing short-term new supply.

  • An increasing amount of ETH is being locked in DeFi, staking, and DEX liquidity pools, tightening the circulating supply of the token.

Moreover, the fee-burning mechanism (such as EIP-1559) has significantly reduced Ethereum's net inflation rate, showcasing its excellent performance in inflation suppression, even outperforming Bitcoin's fixed supply model.

5. Market Outlook: Will ETH Become the Next Mainstream Asset?

Despite the ongoing debate over ETH's on-chain applications and L2 ecosystem, the following trends are worth noting:

Sustained Interest from Traditional Investors:
ETFs provide a more robust investment pathway, attracting funds that cannot directly participate in on-chain activities.

2025 Bull Market Expectations:
In the context of global economic recovery, Ethereum, as the second-largest crypto asset, may experience rapid price catching up.

Competition and Potential:
The sluggishness of the altcoin market may further solidify Ethereum's position as the preferred investment target beyond Bitcoin.

Ethereum is reborn in the ETF craze. Can it shake Bitcoin's position?

The actions of BlackRock and Fidelity have shown that Ethereum is rapidly becoming a new favorite in the traditional financial sector. Driven by ETFs, its market share and price potential will further increase.

However, the true value of ETH lies in its continuous technological and ecological development. In the coming years, the ability to enhance market attractiveness through staking ETFs or other innovative products will be a crucial test for Ethereum's market position.

Ethereum, can it shine again with the ETF craze? The market is watching.
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