Ether-focused exchange-traded funds (ETFs) are experiencing a surge in popularity, with experts forecasting a robust performance in 2025 that could outpace Bitcoin ETFs.
Data from CoinShares reveals that Ether ETFs have recorded seven consecutive weeks of net inflows as of December 16, including an impressive $2.2 billion inflow during the week of November 26—a record for the sector.
This trend is expected to persist into 2025, driven by the strengthening ETH spot price and the possibility of regulators allowing ETFs to incorporate staking yields. “Current net inflows into ETH ETFs mirror the trajectory of gold ETFs, but I anticipate an acceleration from here,” noted Nate Geraci, president of The ETF Store, in a December 20 post on X.
ETH’s Market Advantage
Ether’s market performance has recently outshone Bitcoin in both spot and derivatives trading, according to a December report by crypto exchange Bybit. In contrast, Bitcoin ETFs experienced their largest-ever net outflows on December 19.
Matt Hougan, head of research at Bitwise, highlighted Ethereum’s growing network activity, spurred partly by the proliferation of artificial intelligence applications. While Solana led in layer-1 activity throughout 2024, Ethereum’s ecosystem, including its layer-2 Base network, has emerged as a key hub for AI operations.
“A significant amount of AI activity is happening within the ETH ecosystem, contrary to assumptions that Solana dominates this space,” Hougan stated in a December 19 interview. He added, “I remain optimistic about both networks but believe ETH’s potential is underestimated.”
VanEck, a leading asset manager, projects Ether’s spot price to climb to $6,000 by late 2025, driven by Ethereum’s ability to generate up to $66 billion in annual free cash flow by 2030. This could propel ETH prices to as high as $22,000 in the long term.
Staking Integration in ETFs
The inclusion of staking yield in U.S.-based Ether ETFs might soon become a reality, according to a recent Bernstein Research report.
Staking involves locking up ETH as collateral on the Ethereum network, allowing participants to earn rewards from transaction fees and other incentives. However, staking also carries risks, including the potential loss of funds if validators fail to operate correctly.
As of December 20, staking yields offer an annualized return of approximately 3.35%, denominated in ETH, per data from Staking Rewards.
“I believe there’s a strong possibility that staking will be explored and eventually implemented in U.S. ETFs,” Hougan remarked.
Adding to the optimism, the U.S. Securities and Exchange Commission recently approved two ETFs combining a market-weighted index of Bitcoin and Ether, paving the way for greater fund inflows into ETH-focused products.
With these developments, 2025 could mark a defining year for Ether ETFs, solidifying their position as a key investment vehicle in the crypto space.
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