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

1. Capital inflows set new records: ETH ETF market recovered significantly

On-chain data overview:

  • Since November 21, the Ethereum ETF has maintained net inflows almost every day, 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 increasing. Especially as the recent ETH price approaches $4,000, the recovery in spot purchases and the surge in ETF fund inflows are forming a virtuous cycle.

2. Giants 'running to the field': ETH Holdings Surge

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

BlackRock:

  • The number of known on-chain ETH wallets has exceeded 820,000, with a noticeable acceleration in capital inflow.

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

Fidelity:

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

Grayscale:

  • Although BlackRock and Fidelity are catching up quickly, Grayscale remains the largest holder of ETH, with its Ethereum trust holding $5.56 billion worth of ETH.

The proactive positioning of these giants indicates they are preparing in advance for a potential bull market in 2025, while also attracting traditional investors to join this wave.

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

Ethereum's staking feature adds a unique appeal to its ETFs:

Possibility of Staking:

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

  • There are market opinions suggesting that ETF products allowing staking may emerge in the future to achieve higher yields.

Challenges and Risks:

  • Staking involves longer lock-up periods and potential risks from hacks or vulnerabilities.

  • The conservative nature of ETFs dictates that they mainly focus on attracting traditional funds while temporarily avoiding excessive participation in DeFi or other on-chain activities.

Potential Impacts:

  • 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 ETH prices.

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.

Additionally, the fee-burning mechanism (such as EIP-1559) has significantly reduced Ethereum's net inflation rate, making it perform excellently in terms of inflation suppression, even better than Bitcoin's fixed supply model.

5. Market Outlook: Will ETH become the next mainstream asset?

Although there are still controversies regarding ETH's on-chain applications and the L2 ecosystem, the following trends are worth paying attention to:

Continued interest from traditional investors:
ETFs provide a more robust investment pathway, attracting capital inflows from those unable to participate directly in on-chain activities.

2025 Bull Market Expectations:
Against the backdrop of a global economic recovery, Ethereum, as the second-largest crypto asset, may experience a rapid price catch-up.

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

Ethereum's rebirth in the ETF boom, can it shake Bitcoin's position?

The actions of BlackRock and Fidelity have already indicated that Ethereum is quickly becoming the new darling of the traditional finance 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. Whether the market appeal can be enhanced through staking ETFs or other innovative products in the coming years will be a significant test for Ethereum's market position.

Ethereum, can it achieve glory again through the ETF boom? The market is watching.
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