Institutional investors are increasing their holdings of Ethereum as spot ETF flows improve following a recent market crash that caused the asset to drop by 23% in less than 24 hours. On August 5, nine newly launched spot ETH ETFs saw an aggregate inflow of $49 million, marking the second-highest inflow day since the funds started trading. This positive trend comes after a period of ten days where only four days showed inflows, indicating that institutional investors are taking advantage of the dip in Ethereum prices.
ETF specialist James Seyffart confirmed this trend, stating that ETF investors likely bought the dip in Ethereum. Among the ETH ETFs, BlackRock’s ETHA fund led the way with an inflow of $47.1 million, bringing the total flow of funds to $760 million. VanEck’s ETHV fund and Fidelity’s FETH fund also saw significant inflows of $16.6 million and $16.1 million, respectively. Other funds like Bitwise ETHW and Grayscale’s Ethereum Mini Trust (ETH) also received inflows, while the main Grayscale ETHE fund experienced an outflow of $46.8 million, its lowest since becoming a spot ETF.
In contrast, Bitcoin funds saw outflows totaling $168.4 million on Monday, with Fidelity, Ark 21Shares, and Grayscale all experiencing significant outflows. Grayscale’s Mini Bitcoin Trust did see a minor inflow, but the focus remained on Ethereum as investors showed more interest in the asset.
Despite the recent market crash that saw Ethereum drop to its lowest price of $2,171 on August 5, the asset has shown signs of recovery during the Tuesday morning Asian trading session, reclaiming $2,500. To sustain this upward momentum, Ethereum will need to break resistance at $2,900, which may take some time, especially if Bitcoin’s recovery is slow.
Overall, institutional investors are showing confidence in Ethereum by increasing their holdings through spot ETFs, demonstrating their willingness to buy the dip and capitalize on the asset’s potential for future growth. As the cryptocurrency market continues to evolve, these investment trends provide valuable insights into the behavior and strategies of institutional players in the digital asset space.