Crypto ETF Investors Want ‘Ethereum Over Bitcoin’ Amid Surging Demand: CoinShares

Funds offering exposure to Ethereum have been growing at a faster rate than Bitcoin counterparts, underscoring newfound demand for the asset, according to CoinShares Head of Research James Butterfill.

Over the past 12 weeks, Ethereum-linked funds’ assets under management have grown 19.5% to $19.6 billion, he wrote in a report on Monday. The AUM of Bitcoin-linked funds’ has meanwhile increased 9.8% to $176 billion over the same period, he added.

“People are preferring Ethereum over Bitcoin,” Butterfill told Decrypt. “Although the number is lower [for Ethereum] than Bitcoin, proportionally, it’s much more significant.”

Renewed interest in Ethereum comes amid the asset’s climb above the $3,000 mark for the first time in five months. Although the asset’s price has yet to eclipse its pandemic-era high of $4,900, Ethereum’s price has surged 85% over the past three months.

At the same time, Bitcoin’s price has soared to new heights, hitting $122,800 early Monday before retreating, according to crypto data provider CoinGecko.

Bitcoin had a blockbuster debut on Wall Street last year through exchanged-traded funds that now manage more than $148 billion in assets, according to crypto data provider CoinGlass. The introduction of Ethereum ETFs in the U.S. was more muted, partly due to Ethereum’s narratives being less established, analysts say. Those funds have $12.7 billion in AUM. 

As chair of Ethereum treasury firm BitMine, however, Fundstrat co-founder Tom Lee is among the new faces pitching Ethereum as an investment.

Last week, Ethereum-linked funds generated $990 million in inflows, while Bitcoin-linked funds pulled in $2.7 billion. Butterfill described it as “record-breaking momentum,” representing the second best week for crypto funds, overall, on record. 

Still, Bitcoin and Ethereum were relative outliers.

Solana-linked funds generated $92 million worth of inflows last week, pushing year-to-date- inflows to $206 million. Its price has risen 10% to 168% over the past week.

Although XRP’s price has jumped over 31% to $3 in the past week, representing a fresh, seven-year high, investors pulled $104 million from funds for the Ripple-linked asset. That dropped year-to-date inflows to $231 million.

Butterfill highlighted the WisdomTree Physical XRP exchange-traded note, which had  $115 million in outflows last week. Because the activity was limited to one fund, he suggested that it’s not a trend or “something particularly ominous.”

Still, crypto asset manager 3iQ Digital touted the adoption of its XRP-linked ETF in Canada on Monday. The firm’s XRP ETF, which debuted less than a month ago, has so far taken in $50 million worth of assets, a “significant milestone,” President and CEO Pascal St-Jean said on X.