Ethereum Funds Draw Highest Inflows Since March

Large entities are warming up to Ethereum again, according to CoinShares’ latest Digital Asset Fund Flows Weekly report.

Funds holding the asset had their best week since March, notching $69 million worth of purchases, and bringing the year-to-date flows up to $81 million. Figures like these are in stark contrast to last year, when CoinShares called Ethereum the “least loved asset”.

“It's too early to tell,” James Butterfill, head of research for CoinShares told The Defiant, “but sentiment has definitely improved and it comes off a couple of years of very weak sentiment when compared to Bitcoin or Solana.”

Butterfill put a pin in the expectations of immediate positive price action for ETH, however.

“We could well see a repeat of bitcoin outflows in the early launch stage of the ETFs in July, as many investors have been locked in to the ETH Grayscale product in recent years due to the steep discount to NAV, once it converts to an ETF and becomes more liquid, many investor may decide to sell at that point,” he said.

Ethereum dropped 5% to $3,499 today. The asset gained 20% in the past 30 days.

According to the June 10 report, institutions added $2 billion worth of digital assets to their balance sheets, mainly in Bitcoin. Entities bought more than $1.9 billion worth of BTC over the past seven days.

These numbers mark the fifth-straight week of accumulation, with total inflows reaching $4.3 billion.

“Institutions seem to be treating Bitcoin less as a speculative asset and more as a diversification tool, especially given the high correlation between equities and bonds,” Butterfill noted. “They are increasingly buying and holding Bitcoin, as indicated by the minimal outflows from ETPs this year.”

Grayscale Continues To Surprise

For Butterfill, the biggest shocker in the past seven days has been Grayscale’s marginal outflows.

After the fund sold in vast quantities in the beginning of the year when the spot Bitcoin ETFs launched, the faucet has been all but closed. Only $29 million worth of cryptocurrencies were sold by the firm, which brings the total for the year up to $17.8 billion. The fund still holds nearly $20 billion worth of bitcoin.

“Its outflows were very low, and they have been steadily subsiding in recent weeks,” he told The Defiant. Butterfill said this suggests that there is stabilization for Grayscale, although it might also be in anticipation of the mini-fund they are launching, which comes with much lower fees.

BlackRock is now the largest Bitcoin ETF by assets, surpassing Grayscale. According to a Dune dashboard, the largest asset manager in the world now holds more than 301,000 BTC or $21 billion, versus Grayscale’s 285,000 bitcoin or $19.8 billion.

Spot Bitcoin ETFs are mostly concentrated in the top 3 asset managers. BlackRock and Grayscale are followed by Fidelity, which holds nearly 20% of all Bitcoin ETFs (or $12 billion worth) held in these instruments. Fourth place belongs to 21Shares with $3.4 billion (5.6% market share).