Happy first birthday, ethereum ETFs

July 23 marks one year since the SEC approved ethereum ETFs, and these funds now hold $15.7 billion in assets under management. While they had a sluggish start, the pace has picked up recently, buoyed by several factors including the GENIUS Act’s passage.

Nic Roberts-Huntley, CEO and cofounder of Blueprint Finance, told Sherwood News that ethereum ETFs have had a more measured first year compared to bitcoin’s explosive launch in January 2024, reflecting the complexity of ethereum’s value proposition rather than fundamental weakness.

In their first week of trading, ethereum ETFs suffered hundreds of millions of dollars in outflows. In contrast, bitcoin ETFs saw more than $1 billion in inflows in their first few days of trading, Farside Investors data shows.

“The institutional adoption pattern we’re seeing is actually logical — firms are starting with bitcoin as their digital asset entry point, then expanding into ethereum as they understand the infrastructure layer,” Roberts-Huntley said.

The week before their first birthday, ethereum ETFs saw record inflows, attracting $726.6 million on July 16, $600 million on July 17, and a record $2.12 billion in inflows for the full week, nearly double its previous record of $1.2 billion.

Juan Leon, senior investment strategist at Bitwise, told Sherwood that ethereum will benefit greatly from the regulatory clarity surrounding stablecoins and the growth in tokenization.

The stablecoin market cap stands at $262 billion, and stablecoins on the ethereum blockchain take the lion’s share with a $130 billion market cap, per DefiLlama data.

“We are seeing very strong institutional investor appetite as they better understand ethereum’s opportunity, and demand could result in $10 billion net inflows during the second half of 2025,” Leon said.  

Ethereum, the second-largest crypto at a $450 billion market cap, has been on a roll lately, up 22% in the past week.

David LaValle, global head of ETFs at Grayscale, told Sherwood News that as ethereum ETFs celebrate their first anniversary, there is an increase in several key performance metrics, including client engagement, trading volumes, and fund flows, which suggests the investors are looking beyond bitcoin as they consider an allocation to crypto. 

“Looking ahead, we anticipate continued ethereum ETP adoption, particularly as the market matures and ethereum’s use cases like tokenization and DeFi gain more traction,” LaValle said.

The most successful ethereum ETF is iShares Ethereum Trust ETF, with $9.6 billion in assets under management.

Following BlackRock, the other funds rounding out the top five are:

• Grayscale Ethereum Trust ETF, with $3.4 billion in assets under management.

• Fidelity Ethereum Fund, with $1.3 billion in assets under management.

• Grayscale Ethereum Mini Trust ETF, with $1.3 billion in assets under management.

• Bitwise Ethereum ETF, with $496 million in assets under management.

Looking ahead

Another factor that could boost ethereum ETFs even higher is whether the SEC allows staking within the funds, a change many firms and crypto insiders have supported for some time.  Staking involves locking up coins and earning rewards in return for helping to secure the blockchain.

Currently, staking within US spot ethereum ETFs isn’t allowed, meaning investors may lose out on revenue opportunities if they choose to park their cash in ethereum ETFs, but this could change soon.

Recently, Nasdaq — on BlackRock’s behalf — filed an amended application with the SEC to add staking to the iShares Ethereum Trust.

Jason Linehan, VP of strategy at SharpLink Gaming, which recently became the world’s largest corporate ethereum holder and now has 360,800 tokens, told Sherwood that ethereum ETFs still have work to do to realize the full potential of ethereum as an investment.

“We hope that regulators will soon be able to approve staked ETH ETFs so that more investors can benefit from the native staking yield that ethereum offers. This will also put the billions in ETH ETFs capital to work, making the ethereum platform even safer and more secure, increasing its economic bandwidth, making it more attractive for stablecoin and tokenized RWA issuers,” Linehan said.

Blueprint Finance’s Roberts-Huntley echoed the sentiment, saying that staking-enabled ETFs will be the real unlock and that the current products are just the foundation.

“Once institutions can access both price appreciation and network rewards through a regulated wrapper, that changes the entire institutional conversation around productive digital assets,” Roberts-Huntley said.