Bitcoin & Ethereum Diverge—ETF Flows Just Flipped The Narrative

Data shows the demand for spot exchange-traded funds (ETFs) has cooled off for Bitcoin, while Ethereum has continued to attract inflows.

In a new thread on X, the on-chain analytics firm Glassnode has talked about how the total balance of the US spot ETFs has changed for Bitcoin and Ethereum recently. The spot ETFs refer to investment vehicles that provide an alternate means of gaining exposure to a cryptocurrency’s price movements in a manner that’s familiar to traditional investors.

These ETFs are a relatively new presence in the sector, but they have gained sufficient popularity to become a key part of the market. Investors who previously avoided digital assets due to the perceived complexity of wallets and exchanges can now invest through ETFs, which trade on traditional exchanges.

The US Securities and Exchange Commission (SEC) approved the spot ETFs for Bitcoin back in January 2024. They got approval for Ethereum half a year later, in July 2024.

First, here is how the balance held by the spot ETFs has changed for Ethereum since their inauguration:

As displayed in the above graph, the total balance of the Ethereum spot ETFs has been on the rise recently. In fact, the cryptocurrency has now seen four straight weeks of net inflows.

In all, 97,800 ETH have entered into the wallets associated with these ETFs during this green netflow streak. Though despite the continuous inflows, their total holdings are yet to hit the 3.81 million ETH peak from February, as they currently sit at 3.77 million ETH, about 41,000 tokens lower. “Accumulation is steady, but room remains for further upside,” notes Glassnode.

Bitcoin has also seen growth in its spot ETF holdings recently, but unlike Ethereum, the number one digital asset saw the metric surpass its high from February last month.

That said, while the Bitcoin spot ETFs were enjoying inflows until very recently, the trend has changed during the past week as net outflows have occurred instead. This has been the first negative week in eight for the BTC ETFs.

“Total holdings are now 1.20M BTC, down ~11.5K BTC from the late-May peak,” explains the analytics firm. “A pause in demand after a strong run-up – watch for signs of re-acceleration.”

It now remains to be seen how things will develop in the coming days for the top two cryptocurrencies and whether the divergence that is starting to develop between them will only take further hold.

Bitcoin has seen a jump of about 2% during the past day and has recovered to $107,600.