- Ethereum ETF inflows in February have jumped seven times higher than January levels; in contrast, Bitcoin ETFs reported $376 million in net outflows.
- The upcoming Pectra upgrade on April 8 promises to enhance Ethereum’s execution and consensus layers.
Demand for exchange-traded funds (ETFs) based on Ethereum (ETH) has considerably increased in the US, with a staggering $393 million in net inflows, which is way above capital complements that are entering Bitcoin ETFs. According to Farside Investors, this figure is now reported to be seven times greater than what it was in January.
Ethereum ETFs Outshine Bitcoin ETFs
For the first time ever, Bitcoin ETFs have reported a net outflow of $376 million by the end of the first week of February. Only four days this month were profitable for traders, meaning the overall sentiment toward Bitcoin has certainly declined. However, what worked in favor of Ethereum ETFs was the fact that they only suffered two downturns in outflow during trading days, outshining BTC ETFs.
As for this shift, market users connect it with carry trading strategies. These include investing in spot ETFs against accepting short positions for Ether on CME and a mix of bullish investors betting on Ethereum price expectations before the Pectra upgrade initializing.
Pectra Upgrade & Surge In Interest by Institutional Investors
This upgrade has the potential to greatly improve the network performance of Ethereum’s execution and consensus layer. This is bullish for Ether since it ensures further support for the asset against competitors
With the April 8 Pectra upgrade, Ethereum’s network performance is expected to improve by enhancing its execution and consensus layers. As mentioned in our previous news article, this upgrade is anticipated to give Ethereum an edge against competing Layer 1 blockchain like Solana.
“ETH has a solid foundation for a resurgence,” said Nick Forster, founder of decentralized options platform Derive.xyz, in an email, according to a CoinDesk report. “The Pectra upgrade is bringing network improvements, faster transactions, and better staking mechanics,” he added.
Furthermore, Ethereum’s co-founder Vitalik Buterin, has been an advocate for increasing the L1 gas limit by a factor of ten. This, however, can create new challenges in application development and network security. This development is promising, especially with institutions’ renewed focus on Ethereum after the recent $120 million investment from the Ethereum foundation into DeFi projects.
Recent ETH Price Action
Whilst, the ETH price has remained range bound between $2600 and $2800 since the dramatic drop on February 3. This is despite significant investments in ether ETFs. Similarly, the price of Bitcoin continues to hover below the $100,000 mark and is restricted in the price range it has been trading at, while meme coin volatility is predominant in short-term trading movements.
Forster also weighed in on the Ethereum price prediction in the short term. “There’s now a 30% chance ETH will hit above $3K by the end of the quarter, up from 28% last week,” Forster added. Moreover, with Ethereum undergoing technical upgrades, institutional investors seem to be anticipating profits.
Further, this concerns the Ethereum-focused rumor, ETHrealize. This new initiative, headed by Vivek Raman, attempts to merge traditional financial institutions with Ethereum’s developing financial ecosystem.
