Institutional investors bet big on Ethereum despite bear market

Despite going through an extended crypto bear market, the most recent approvals and launches of multiple Ether Futures ETFs have boosted institutional investors’ interest in the second-largest cryptocurrency by market cap: Ethereum (ETH).

On October 2, six Ether Futures financial products started to be officially traded. They are, as follows, with their respective net expense ratios, according to CNBC:

  • BitWise Ethereum Strategy ETF (AETH), 0.85%
  • Bitwise Bitcoin and Ether Equal Weight Strategy ETF (BTOP), 0.85%
  • ProShares Ether Strategy ETF (EETH), 0.95%
  • ProShares Bitcoin & Ether Equal Weight Strategy ETF (BETE), 0.95%
  • Bitcoin & Ether Market Cap Weight Strategy ETF (BETH), 0.95%
  • VanEck Ethereum Strategy ETF (EFUT), 0.66%

In this context, James Butterfill — Head of Research at CoinShares Co. — reported an institutional inflow of $13 million in Ethereum products by October 4, being the first net-positive week in a seven-week run.

Notably, Butterfill said that this current inflow could not be compared to the $200 million of institutional investors’ capital inflow for Bitcoin (BTC) during the launch of the Bitcoin Futures ETF by ProShares in 2021, which can be explained by the current bearish market cycle, in opposed to 2021’s euphoric bull market.

Institutional investors’ flows amid an extended bear market

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Nevertheless, the extended bear market is still visible among institutional investors’ money flow. CoinShares data shows 24 weeks of net-negative flows (outflows), out of 39 weeks total (61.5%), since 2022.

Weekly Crypto Asset Flows (US$m) — 2022-2023. Source: CoinShares

As of October 4, Ethereum alone saw a $101 million outflow year-to-date (YTD), while Bitcoin had a $219 million inflow in the same time frame. However, weekly and month-to-date (MTD) flows are very similar for both assets, with $16.4 million and $12.9 million inflows for BTC and ETH, respectively.

Flows by Asset (US$m) in October. Source: James Butterfill

Interestingly, Solana (SOL) was the leading asset in institutional investors’ inflow for the first week of October, considering the data shared by James Butterfill, with $22.7 million of net capital being put into Solana’s financial products — creating a good opportunity for SOL investors.

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