Institutional interest pushes Ethereum ETFs on-chain holdings to all-time high

Investments in Ethereum are accelerating in the past few weeks, leading the on-chain holdings of major funds to a new all-time high. The ongoing buying shows a clear accumulation trend where institutions are positioning for an ETH rally. 

The on-chain activity and holdings of Ethereum ETFs suggest the network and the token are nowhere near dead. ETH on-chain holdings for all major ETFs are close to an all-time high, after the last few weeks of accelerated accumulation. 

Blackrock and Grayscale lead institutional demand for ETH

ETF funds have bought over 3.77M ETH, or around 2.97% of the supply, currently above 120M ETH. Alternative data by CryptoQuant points to over 4M ETH acquired by all ETFs, with a market acceleration in June.

The funds based on Ethereum have a much lower level of assets under management but stronger accumulation momentum. Inflows have surpassed BTC since the end of May. The ETFs are approaching $1B in accumulation per month. 

For now, BlackRock and Grayscale remain the biggest holders, with the most rapid new ETH inflows. Grayscale switched to accumulation in the past month, ending the era of divesting its ETH acquired for as low as $90. 

The accumulation happens at a time when ETH still trades sideways, at around $2,561.97, with a total market dominance of 9.03%. ETH stabilized at around 0.024 BTC, ending its long-term slide. 

The ETF accumulation is seen as just one of the positive signs for the Ethereum ecosystem, in addition to growing DeFi activity, stablecoin transfers, and general accumulation in both small and whale-sized wallets. 

ETFs are not the most significant destination for ETH, as many of the tokens are locked in protocols. Currently, Ethereum carries over $63.3B in total value locked, in addition to over 125B in stablecoins. Close to 30% of ETH is staked with validators, while leaving diminishing reserves on exchanges. 

In total, each week, 16,621 ETH is produced, smaller than one single day of ETF inflows. While Ethereum does not offer the same scarcity as BTC, ETFs still control a significant part of the supply. 

Ethereum ETFs show growing daily inflows

Ethereum ETFs have seen much more lively inflows in the past few days, surpassing the accumulation of BTC. 

Spot Ethereum ETFs had an almost unbroken period of net daily inflows since the middle of May. This is the longest period of ETF accumulation since the bull rally in March 2024. 

However, this time, ETH trades at a lower range, after dipping as low as $1,200. Despite this, there is interest in the token, with the potential for a late but outsized rally to a higher price range. 

One of the possible effects of an ETH rally is the launch of a new altcoin market. Despite expectations for an altcoin rally in Q1, most old tokens failed to break out. ETH is considered the one factor to lift up other tokens and chains. 

ETF inflows also precede a new period of fund approvals. This time, the most probable new fund will accumulate SOL, as investors seek to tap the growth potential of other crypto platforms.

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