How are energy investors positioned?
Ether (ETH) exchange-traded funds (ETFs) in the United States witnessed a significant influx of capital, with a net inflow of $393 million recorded for the month, as reported by Farside Investors.
This surge in investment into Ether spot ETFs is a stark contrast to the $376 million net outflow experienced by Bitcoin (BTC) ETFs over the same period.
The nine U.S.-listed Ether spot ETFs saw inflows that were sevenfold higher than those in January, according to data from Glassnode. Notably, these funds only saw outflows on two trading days throughout the month. Conversely, the 11 Bitcoin ETFs struggled with weak sentiment, managing to attract inflows on just four trading days within the month.
Despite the substantial shift of investor interest towards Ether, the cryptocurrency has not seen a corresponding increase in price. Since the price drop to $2,000 on some exchanges at the beginning of the month, Ether has been trading within a tight range of $2,600 to $2,800. Similarly, Bitcoin has remained below $100,000, with both cryptocurrencies experiencing volatile price movements, particularly in the memecoin sector.
The move towards Ether ETFs is partly attributed to carry trading strategies, where investors buy spot ETFs and simultaneously short ETH CME futures. Some of this activity may also represent bullish directional bets on the cryptocurrency.
Looking ahead, market participants are anticipating potential price increases for Ether due to the upcoming Pectra upgrade, scheduled for April 8. This upgrade is expected to enhance Ethereum’s performance by optimizing its execution and consensus layers, which could help it maintain a competitive edge against other Layer 1 blockchains such as Solana.
Nick Forster, founder of Derive.xyz, expressed optimism for Ether’s prospects, citing the technical improvements and network enhancements that the Pectra upgrade will introduce. He highlighted the drive by Ethereum founder Vitalik Buterin for a tenfold increase in the Layer 1 gas limit, which could lead to better application development and security.
Additionally, the Ethereum Foundation’s recent $120 million investment in DeFi projects is seen as a sign of growing adoption and institutional interest, particularly through initiatives like ETHrealize, led by Vivek Raman, which seeks to bring traditional financial institutions into the blockchain space.
Forster concluded with a positive outlook on Ether’s price trajectory, stating, "There’s now a 30% chance ETH will hit above $3K by the end of the quarter, up from 28% last week."
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