Spot Ethereum (ETH) ETFs Will See Minimal Inflows Unless Ether Price Rallies: Analyst

The approval of staking for U.S. spot exchange-traded funds (ETFs) is unlikely to drastically increase investor inflows into the products unless Ether (ETH) experiences a prolonged price rally, Bloomberg ETF analyst Eric Balchunas asserts.

While the addition of staking is a positive development that could benefit the ETFs, Balchunas argues that the lack of a sustained upward trend in ETH’s price is limiting the attractiveness of these ETFs to investors.

Since their U.S. debut in July, spot Ethereum ETFs have struggled to attract significant inflows, in stark contrast to the performance of spot Bitcoin ETFs. The latter saw Bitcoin (BTC) reach new all-time highs within two months of their January 2024 launch, and they quickly drew in massive sums from investors.

Balchunas attributes the lukewarm performance of Ethereum ETFs to the absence of a consistent price rally. He notes that ETH’s price experienced a steep decline post-launch, rendering recovery efforts challenging.

A notable exception occurred in December 2024, following Donald Trump’s election victory in November, which sparked a crypto market rally. During this period, ETH surged 71% to $4,107, leading to a 19-day streak of positive inflows into spot Ether ETFs, to the tune of approximately $2.44 billion, according to Farside data.

However, ETH has since entered a downtrend, currently trading around $1,809—a 56% decline from its December peak. This downturn has stalled the recent rally in ETF inflows, which had been steadily increasing since July 2024.

Balchunas maintains that for these inflows to pick up again, ETH would need a “multi-month run” to higher highs, accompanied by a “strong narrative.”

“It needs something that is more than just a good week here and there. People will come in for a good month or two of good returns.”

The U.S. Securities and Exchange Commission (SEC) is yet to approve staking for Ether ETFs, despite multiple requests from issuers earlier this year.

According to James Seyffart, an ETF analyst at Bloomberg, early signs point to the possibility of an approval by the end of May. Alternatively, the final deadline for a decision is at the end of October, with potential intermediate deadlines in late August and early December for a pending decision.