Institutional investors are flooding into Ethereum funds at nearly triple the rate of Bitcoin, providing a glimpse at how Wall Street may be positioning this year for the second-largest crypto.
Ethereum exchange-traded funds clocked $704 million in inflows on Wednesday compared to Bitcoin ETFs' $86.7 million, the third consecutive day of Ethereum’s dominance over the alpha coin, according to Farside Investors data.
The three-day lead has delivered $2.2 billion to ETH ETFs following Monday's record $1 billion single-day inflow, versus just $330.9 million for Bitcoin products.
"Institutions are playing a key role," Peter Chung, head of research at Presto Labs, told Decrypt as Ethereum benefits from regulatory developments, including the GENIUS Act and the “Project Crypto” speech, where SEC Chair Paul Atkins supported DeFi growth for institutions.
The momentum has propelled Ethereum to $4,775, up over 60% in the past month, according to CoinGecko, and within 4% of its November 2021 all-time high near $4,900.
The rally has already inflicted some pain on bearish traders, with Ethereum liquidations hitting $127.41 million in 24 hours as short positions faced pressure from rising prices, according to CoinGlass.
Monthly Ethereum ETF inflows have reached $2.3 billion, equivalent to 500,000 ETH, while the network has issued only 450,000 ETH since the September 2022 merge upgrade.
The supply-demand imbalance has created upward price pressure as institutional buyers absorb available supply faster than the network creates new tokens.
On Wednesday, Standard Chartered revised its Ethereum price targets to $7,500 by 2025 and $25,000 by 2028, up from a previous $4,000 forecast, citing institutional buying at "nearly double the pace of Bitcoin accumulation during peak periods."
Traders on Myriad Markets see an 86.9% probability that Ethereum reaches $5,000 by January 1, 2026.
(Disclosure: Myriad Markets is a prediction platform developed by Dastan, parent company of Decrypt.)
Digital asset treasury companies, meanwhile, continue to hoover up crypto in record fashion.
That includes Tom Lee's BitMine, which just this week announced it would increase its fundraising target for buying more of the asset by $20 billion.
“When you combine record ETF inflows with corporate and sovereign balance sheet allocations, the result is deep structural demand meeting finite supply,” Rachael Lucas, crypto analyst, BTC Markets, told Decrypt.
“That's a recipe for sustained upward pressure on prices, and a sign that digital assets are firmly embedded in global capital markets,” she said.
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