Ether (ETH) has been lagging behind bitcoin (BTC) in performance year-to-date, but recent trends in exchange-traded fund (ETF) inflows suggest that this period of underperformance may soon be over, according to a new research report from broker Bernstein.
The firm highlighted a significant shift in inflows on Friday, when Blackrock’s spot ether ETF received $250 million, surpassing the $137 million inflows into the asset manager’s larger spot bitcoin ETF. Bernstein analysts, led by Gautam Chhugani, believe this shift creates favorable demand-supply dynamics for ETH, signaling potential for outperformance moving forward.
Another potential boost for ether is the upcoming approval of staking yields. Bernstein noted that while initial ether spot ETF applications did not include staking yields due to regulatory constraints, a more crypto-friendly SEC under a potential “Trump 2.0” administration could pave the way for approval. As Ethereum blockchain activity continues to rise, the staking yield could reach 4-5%, adding to ether’s appeal.
Ethereum remains the leading platform for asset tokenization and stablecoins, which is driving increasing activity on the network. Since Ethereum’s transition to a proof-of-stake consensus mechanism, the total supply of ether has remained stable at 120 million tokens.
Currently, Ethereum’s transaction fees offer a yield of around 3% to stakers, which has led to approximately 28% of the ether supply being locked in staking contracts. Additionally, 10% of the supply is tied up in deposit and lending contracts.
Notably, almost 60% of ether has remained unchanged in the last 12 months, indicating a resilient investor base. This enduring commitment further supports the positive demand-supply dynamics for ether, suggesting strong fundamentals for future growth.
