Ether (ETH) has overtaken Bitcoin (BTC) in exchange-traded fund (ETF) inflows this week as Ethereum network activity jumped 41%, according to market data reviewed by SourceRated. The shift comes amid diverging investor sentiment toward the two largest cryptocurrencies, with Ethereum benefiting from renewed interest in decentralized finance (DeFi) applications.
Analysts attribute Ether’s relative strength to three factors: stronger flows into newly approved ETH ETFs, a rebound in gas fee revenue for Ethereum validators, and anticipation of upcoming network upgrades. ‘We’re seeing institutional allocations rotate toward Ethereum products after months of Bitcoin dominance,’ said a trading desk source at a major investment bank who requested anonymity due to company policy.
Blockchain analytics firm Nansen reported $1.2 billion in net inflows to ETH products last week compared to $900 million for Bitcoin funds. The reversal follows six consecutive months where Bitcoin ETFs captured 70-80% of total cryptocurrency fund flows. Meanwhile, Ethereum’s daily transaction count reached 1.4 million – its highest level since May 2023 – driven by NFT marketplace renewals and Layer 2 scaling solution adoption.
Market observers caution that the trend could prove temporary. ‘Bitcoin remains the institutional safe haven, while Ethereum’s utility-driven demand makes it more cyclical,’ noted Clara Medici, head of research at Digital Asset Strategies. Regulatory developments for both cryptocurrencies, including potential SEC decisions on additional ETH products, may determine whether the flow divergence becomes a sustained pattern.