Key Points:
- BlackRock’s Ethereum ETF has raked in a staggering $11 billion net assets.
- The fund now holds over 3 million ETH, representing 2.5% of Ethereum’s total supply.
- Institutional investors continue to accumulate ETH despite the recent market dip.
Ethereum (ETH) has long been recognised as the second-largest crypto by market cap. However, it is coming toe-to-toe with Bitcoin regarding institutional investment, thanks to BlackRock’s massive Ethereum ETF.
Despite the recent price dips, this fund has shown strength and attracts billions in fresh capital every month.
Massive Growth And BlackRock Ethereum ETF
BlackRock’s Ethereum ETF (traded as $ETHA) has experienced explosive growth over the last month. In July alone, the ETF’s assets under management surged by more than 200%. It climbed from just over $3 billion to $11.37 billion.
This growth mainly occurred due to over $9.7 billion in net inflows within the month. Financial analytics firm Sentora reported this. This means that BlackRock’s Ethereum ETF is now one of the strongest crypto investment players.
More interestingly, the ETF now controls over 3 million ETH. It is equal to about 2.5% of Ethereum’s total circulating supply.
Institutional Conviction Remains High
While ETH’s market price dipped around 4% to $3,499 in early August, institutional sentiment is still overwhelmingly bullish. BlackRock’s fund has stood firm despite the downturn, and even logged zero outflows on August 1.
This vastly differed from the inflows of other issuers like VanEck, Bitwise, and Grayscale. It saw millions in outflows.
This kind of behaviour from institutional players speaks volumes. Despite the short-term price fluctuations, Ethereum is extremely positive.
This is especially considering the backing from asset managers like BlackRock. They are known for making calculated investments.
Ethereum vs. Bitcoin in Capital Flows
According to recent data, large investors are increasingly rotating capital from Bitcoin to Ethereum. In particular, the days between July 9 and July 31 saw 12 new whale wallets accumulate over 808,000 ETH.
Per LookOnChain data, by 9 July, 11 of these wallets had bought a staggering 722,152 ETH worth $2.77 billion.
This further reinforces the change in ETF trends. The whales are choosing Ethereum over Bitcoin, and the trend doesn’t appear to be slowing down.
Bitcoin is still the go-to digital store of value. However, Ethereum’s smart contract dominance and TVL growth appeal to institutional investors looking for growth.
How Does The Ethereum ETF Growth Affect the Market?
The explosion of BlackRock’s ETH ETF means more than just big numbers. It does more than pump the price to new highs.
Instead, it legitimises Ethereum in the eyes of Wall Street investors. It opens the doors for pension, hedge, and asset managers. This may not directly hold crypto, but is open to buying through the ETFs.
The expansion of the ETHA means that Ethereum is no longer a speculative asset. Instead, it is becoming a real market mover that could experience a wave of institutional onboarding. It’s similar to what Bitcoin experienced after the COVID-19 pandemic.
The supply is expected to decrease as more ETH is locked in ETF funds. There are now over 3 million ETH off the liquid market and in institutional hands. This means that the result could be reduced selling pressure during downturns, which could help to stabilise prices over time.
Overall, retail investors tend to copy institutional behaviour when investing funds. This means that BlackRock is expected to inspire more than Wall Street investors.
More and more retailers/whales will hop on board, and Ethereum will achieve legitimacy and more price stability..
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