ETHW: Flows Don’t Lie, Ethereum Regains Its Footing

Summary Ethereum’s momentum has surged, with ETHW up 85% since March, driven by renewed institutional inflows and improving ETH/BTC performance. Spot Ethereum ETFs are seeing record net inflows, nearly matching spot Bitcoin ETFs, signaling strong institutional conviction and capital rotation into ETH. Corporate adoption of Ethereum as a treasury asset is accelerating, reinforcing ETH’s status as a credible institutional asset with significant upside potential. Despite potential short-term volatility from tariff risks, improving flows and favorable ETH/BTC dynamics make ETHW an attractive buy-on-dips opportunity. The Bitwise Ethereum ETF (NYSEARCA: ETHW ) is worth a revisit at this juncture. I last covered ETHW in March, when Ethereum ( ETH-USD ) was underperforming Bitcoin and the ETH/BTC chart was breaking down towards multi-year lows. The inflows into the spot Ethereum ETFs were also weak at the time. But on the hopes of a potential approval of staking in the U.S. spot Ethereum ETFs, I leaned towards a buy rating. ETH has picked up momentum, and ETHW is up 85% since that coverage. With crypto being an inherently volatile asset class, a constant pulse check on the momentum is important for investors to maximize returns. In this article, I’ll explore the renewed case for ETHW, the latest surge, and a focus on the ETFs underlying asset, Ethereum. But before we dive into the article, it is worth taking a walk down memory lane on the spot Ethereum ETFs, the hurdles and progress so far. The spot Ethereum ETFs were approved in May last year, five months after the approval of the spot Bitcoin ETFs. Just like the spot Bitcoin ETFs, the fund managers introduced early fee waivers and other incentives to win investors. Despite the varying fund structures, the ETFs essentially track the same underlying asset, Ethereum. Personally, I favor BITW as a top pick spot Ethereum ETF because of Bitwise’s extensive track record in crypto ETP products. In addition to that, Bitwise already has infrastructure in place with its staking products which gives it an edge for seamless rollout in the event that staking gets approved for the spot Ethereum ETFs. I covered this strategic positioning for staking extensively in my last ETHW coverage in March. The initial momentum for the spot Ethereum ETFs was weak, compared to that of the spot Bitcoin ETF. The recent turnaround in net flows into the spot Ethereum ETFs, and the recovery of ETH/BTC, is an encouraging signal for bulls. What’s driving this surge? Is it sustainable? Is the top near? These are the key questions this article will examine, using data and on-chain signals that support a deeper understanding of Ethereum’s current setup. ETH/BTC: Ethereum’s Comeback Signal Ethereum has steadily closed the performance gap with BTC since late April, when ETH hit the yearly low of 0.01805 BTC per ETH. That was an almost 50% drawdown from the year’s open. ETH opened the year around 0.036 BTC per ETH. The current reversal of the downtrend against BTC is important for our analysis because a rising ETH/BTC pair shows that capital is rotating from Bitcoin into Ethereum. And it is an easy way to understand the relative strength and performance of ETH against BTC. If ETH is lagging too far behind BTC for too long, and then begins to recover, that rebound typically marks a sentiment shift. ETH/BTC trend (TradingView) The Catalysts Behind the Comeback It’s an entirely different narrative when straightforward data supports Ethereum’s comeback and validates capital rotation (as the case currently is). This gives fundamental weight to ETH’s relative strength and price action. If that were not the case, then ETH’s rally would look just like a meme coin with no structural thesis. The two main catalysts behind the recent turnaround have been net inflows in the spot Ethereum ETFs and the increasing (and somewhat surprising) adoption of ETH as a corporate treasury asset. Spot Ethereum ETFs monthly net inflows (SoSoValue) Monthly net inflows into the spot Ethereum ETFs have been positive since April, steadily climbing sequentially since then, and this month’s ( July ) net inflow of $5.19 billion is gearing up to be a record month. And here’s the standout development: this month, the net inflows into the spot Ethereum ETFs have nearly matched the net inflows into spot Bitcoin ETFs. The spot Bitcoin ETFs have recorded $6.01 billion in net inflows in July (that’s just 3.9% of their total net assets of $153.2 billion). While Ethereum’s $5.19 billion in net inflows so far in July represents around 24% of its total net assets of $21.3 billion. The spot Ethereum ETFs saw $1.85 billion in net inflows last week, while the spot Bitcoin ETFs saw just $73 million in net inflows. Ordinarily, such a wide divergence would be considered an outlier; however, last week’s inflow marks the 11th consecutive week of positive inflows. In the week ended July 18 (the penultimate week), ETH’s net inflows of $2.18 billion nearly matched BTC’s net inflows of $2.39 billion. This shift in flow dynamics shows the intensity of demand for Ethereum, despite it being a smaller asset class in terms of assets under management [AuM]. While Bitcoin still has larger total net assets, Ethereum is seeing a disproportionately stronger inflow relative to its size. This is creating a growing conviction in ETH as an institutional asset. Top Ethereum corporate treasury holdings (CoinGecko) That conviction in ETH as an institutional asset is mirrored in the recent uptick in Ethereum adoption by publicly traded companies for their treasury strategy, with these companies now holding about $5 billion worth of ETH on their balance sheet. And these companies have been doubling down on that strategy, announcing subsequent raises and financing rounds earmarked for ETH purchases. For retail investors, this institutional conviction and doubling down point out that Ethereum’s upside potential is still very much intact. The data presented in this piece supports the idea that Ethereum’s comeback isn’t just technical; it is being backed by real capital flow, and it is happening faster than many expected. Bitcoin usually leads in the early stages of a crypto bull market. But when ETH/BTC starts rising, it signals increasing risk appetite among both institutions and retail. And this often precedes a broader altcoin rally. Since the proliferation of altcoins, Ethereum has always been positioned to lead the altcoin rally, and with recent adoption and flows data, this time is likely no exception. Risks and Takeaways Though the tariff overhang has eased and markets have shown signs of improvement since President Trump struck a trade deal with the EU , a replay of the U.S.-China tariff escalation, which mainly sparked last April’s market drawdown, still hangs over the outlook. The outcome of the August 1 tariff deadline could be a recipe for potential near-term volatility in Ethereum and its associated spot ETFs. Beyond the tariff overhang, there isn’t much macro uncertainty that poses significant risk to ETH’s upside in the meantime. While volatility remains possible around August 1, the underlying bid for ETH is strengthening with improved flows, favorable ETH/BTC dynamics, and limited macro drag outside the tariff risk, making Ethereum an attractive “buy-on-dips” among the top cryptocurrencies.

Source: Seeking Alpha