BlackRock and Fidelity have significantly increased their Ethereum (ETH) holdings in the past few days, reflecting a surge in demand for ETH exchange-traded funds (ETFs). According to on-chain data, over $500 million in ETH has flowed into these funds recently. This marks a notable acceleration in inflows, surpassing the slower buildup observed in previous months.
Ethereum ETFs See $1.29 Billion Inflows
Ethereum ETFs have seen almost uninterrupted net inflows since November 21, with only a few neutral days. However, the past week has witnessed record-breaking activity, bringing in a total of $1.29 billion. This surge follows the positive market reaction after the U.S. elections, which boosted both cryptocurrency and traditional asset markets.
Source: CoinAnk
BlackRock and Fidelity are leading the way in Ethereum purchases, with BlackRock’s known wallets now holding over 820,000 ETH. The firm has ramped up its ETH buying, similar to the early hype surrounding the ETF launch earlier this year. Fidelity, on the other hand, has expanded its holdings to more than 114,000 ETH, seeing a substantial increase in inflows after months of relatively slow growth. Both companies have capitalized on the renewed interest in Ethereum as the price hovers just below the $4,000 mark.
BlackRock and Fidelity Drive Ethereum ETF Growth
The growing interest in Ethereum ETFs coincides with the bullish sentiment in the broader crypto market. The total assets managed by BlackRock’s Ethereum ETF have surged to $3.55 billion, while Fidelity’s ETF has grown to $1.56 billion. Grayscale, despite recent restructuring, still holds the largest amount of ETH, with its Ethereum Trust managing $5.56 billion in assets. Grayscale has reduced its selling activity, contributing to the more optimistic outlook for ETH.
Market observers suggest that Ethereum’s relatively low inflation rate is another factor driving interest in its ETFs. ETH’s annual inflation rate has dropped significantly from a peak of 0.6% to just 0.12%. This reduction has helped position ETH as a more scarce asset, with only 3,569 ETH being minted each week, down from over 17,000 earlier this year.
Despite these positive developments, the Ethereum network itself remains somewhat controversial. Technical issues persist, and many industry insiders remain cautious about the network’s future. Ethereum continues to serve as the backbone for the Layer 2 ecosystem, but its base layer is not producing significant new inflows, as most of the activity now occurs on Layer 2 platforms and decentralized applications.