Ethereum (ETH) has seen a significant surge in ETF inflows, outpacing Bitcoin (BTC) by 25 times in weekly net inflows. This surge has pushed the CME ETH basis trade to nearly 12%, raising the question of whether ETH will reach the $4K mark soon.
During the week of July 21st to July 25th, ETH ETFs received net inflows of $1.85 billion, compared to only $72 million for BTC ETFs. The total assets held by the ETH ETF complex now exceed $20 billion, with BlackRock’s ETHA contributing significantly to this figure by crossing $10 billion in assets.
Hedge funds have been actively participating in the ETH basis trade, where they buy spot ETH ETF and short the asset on CME Futures. The surge in ETH’s interest on CME Futures, reaching nearly 2 million coins compared to only 150K BTC, further supports this basis trade thesis. Additionally, the ETH CME annualized basis has surged to nearly 12%, indicating a divergence in ETF flows between ETH and BTC driven by basis trade.
Despite the significant ETF inflows, the ETH/BTC ratio, which indicates capital rotation between the two top crypto assets, remained relatively unchanged. This muted response in the ratio suggests that most altcoins have cooled off, as the ETH/BTC ratio is a key indicator of the altcoin market segment.
On the other hand, there has been a noticeable increase in spot demand for ETH, especially from treasury firms anticipating stablecoin and tokenization booms. Ark Invest’s Cathie Wood highlighted that the rush to unstake ETH from validators was partly driven by demand from ETH treasuries with the potential for 2x returns. Coinbase analysts also supported this view, suggesting that the market is reallocating capital based on shifting yield opportunities rather than a loss of confidence in ETH or the ecosystem.
At present, ETH is trading at $3.7K and could potentially make another attempt at reaching $4K if market sentiment remains positive. Overall, the influx of ETF inflows, basis trade activities, and increasing spot demand indicate a positive outlook for ETH in the near future. The Importance of Mental Health in Today’s Society
In today’s fast-paced and high-stress world, mental health has become a growing concern for many individuals. The pressures of work, school, relationships, and the constant bombardment of information from social media and news outlets can take a toll on our mental well-being. It is crucial that we prioritize our mental health and take steps to maintain a healthy mind.
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