Ethereum (ETH) rebounded over 18% in the past 24 hours, recovering from a steep fall on Monday. This surge has turned attention to the blockchain’s strong fundamentals.
ETH ETFs See Significant Inflows
On Monday, U.S.-listed spot ether (ETH) exchange-traded funds (ETFs) saw net inflows of nearly $49 million despite a 20% price drop. This highlights the ongoing demand for Ethereum, the second-largest token by market capitalization.
Monday’s Price Crash
Ether’s price plummeted by 20% on Monday, marking its biggest one-day fall since 2021. This decline was triggered by Jump Crypto moving large amounts of ETH to centralized exchanges, preparing for potential sales. The broader crypto market also faced a sell-off, with over $340 million in ETH futures liquidations.
Investors Buy the Dip
Professional investors took advantage of the price drop. SoSoValue data shows ETH ETFs traded over $715 million, the highest since July 30. BlackRock’s ETHA led with $47 million in inflows, followed by Fidelity’s FETH and VanEck’s ETHV, each with $16 million in inflows. Grayscale’s ETHE was the only product with outflows at $46 million, while their smaller Ethereum Mini Trust saw $7 million in inflows.
Long-term Demand Yet to Appear
Despite the recent inflows, ETH ETFs have recorded net outflows of $460 million since their launch on July 23. This contrasts with Bitcoin ETFs, which saw over $1 billion in net inflows in their first 12 days of trading. ETF flows help identify market trends and show where investors are putting their money.
Ethereum’s Strong Fundamentals
Some market observers noted that applications built on the Ethereum network remained resilient despite the price drop. This resilience points to strong fundamentals. Alice Liu, lead researcher at CoinMarketCap, attributed the price drop to the Jump Crypto sell-off and liquidation of other large wallets. She noted the positive performance of LSDFi (liquid staking derivatives finance), with no major increase in Lido’s withdrawal queue and no dependency on different projects for liquid staking.
DeFi Market Revival
The recent liquidation appears to have revived the DeFi market, with significant activity picking up on the Ethereum network. Gas fees also fell to a more manageable 10-15 Gwei after peaking at 370 Gwei, making network transactions more affordable.
Conclusion
Ethereum’s 18% surge reflects investor confidence and strong blockchain fundamentals. While the market remains volatile, the underlying strength of Ethereum’s network offers a positive outlook for the future.
