Ethereum ETFs and Strategic Reserves Now Account for 7.98% of ETH’s Total Supply
Ethereum ETFs and strategic reserves now account for 7.98% of ETH’s total supply, according to data from Strategic ETH Reserve.xyz. This percentage has risen from about 3% as recently as the beginning of April, when no publicly listed company held any Ethereum as a reserve asset.
Since then a wave of corporations have added ETH to their treasuries, helping the altcoin to rise from $1,800 in early April to its current price of $4,300. This includes firms such as Bitmine Immersion Tech, The Ether Machine and SharpLink Gaming, which respectively own 1.2 million ETH, 598,800 ETH and 345,400 ETH.
At the same time, Ethereum ETFs have gone from holding 3.5 million ETH to 6.15 million ETH, an amount which on its own equals over 5% of the alt’s total circulating supply. The two biggest Ethereum ETFs are currently BlackRock’s iShares Ethereum Trust ETF, with $13.1 billion in net assets, and Fidelity’s Ethereum Fund, with $3 billion.
The total value of all Ethereum funds now stands at $31.9 billion according to the latest CoinShares report, which represents 17.8% of the value of all Bitcoin funds, at $179.3 billion. The total AUM of ETH funds has risen from $14.6 billion as recently as June 30, meaning that these funds have more than doubled within a month.
For some experts, this rapid rate of growth stems largely from Ethereum’s immaturity in relation to Bitcoin, for which total funds have seen an increase in AUM of only 12.5% since the end of June. “What’s happening now feels familiar: many who missed the Bitcoin treasury moment are jumping on Ethereum and other altcoins, hoping for the same impact,” says Melanion Capital CEO Jad Comair, speaking to Decrypt.
Other analysts and industry participants agree with this kind of take, with YouHodler Chief of Markets Ruslan Lienkha telling Decrypt that Ethereum had “lagged in performance” prior to its recent gains, and that it’s still trailing on its 2021 ATH of $4,878. He explained that Ethereum’s “relative underperformance” creates an “appealing risk-reward profile: if macroeconomic and market conditions remain favorable, ETH could deliver outsized gains over a shorter time frame compared to Bitcoin.”
Yet it’s not only starting from a relatively low base that has helped make Ethereum attractive to institutions and public companies, but also its status as the biggest layer-one network in crypto. “Ethereum’s robust ecosystem offers diversified utility beyond being a store of value, further enhancing its investment appeal for institutions and public companies seeking both growth potential and technological exposure,” Lienkha added.
Where Next for Ethereum ETFs?
Not everyone is convinced that Ethereum ETFs will maintain its recent levels of activity, however, with Comair likening the recent growth in ETFs and strategic ETH reserves to the 2017-18 “ICO boom.” “But ETH doesn’t command the same potential or level of corporate interest, and we’ll probably see Solana or others branded as ‘treasury coins’ next,” he argues.
Comair, whose company offers a Bitcoin Equities ETF, also suggests that Bitcoin treasuries are “fundamentally creating value” for corporate finances, whereas “most” altcoin treasury moves are “likely to be a passing fad.” Yet Lienkha contends that market conditions currently remain “constructive,” in terms of major indices trading near or at all-time highs, and that the trend of growing Ethereum ETFs and treasuries will continue.
“This risk-on environment is likely to stimulate further capital inflows into ETH, particularly as institutions continue to diversify their digital asset exposure beyond Bitcoin and recognize Ethereum’s broader utility within the blockchain ecosystem,” he says.