Ethereum ETFs are making headlines once again, registering robust inflows as institutional and retail interest continues to climb. According to CoinShares, Ethereum products have recorded their seventh consecutive week of net inflows, raking in $296.4 million, signaling a strong resurgence of confidence in the second-largest cryptocurrency by market capitalization.

BlackRock's iShares Ethereum Trust (ETHA Quick QuoteETHA - Free Report) accounted for the majority of the flows, bringing in $281.3 million and registering 15 consecutive days of inflows. This marks the strongest inflow streak since the U.S. presidential elections in November 2024 (read: 5 ETFs to Ride the Bullish Wave of Ethereum's Pectra Upgrade).

The recent surge in inflows represents one of the most significant upward trends for digital asset funds this year. After a period of sluggish performance and regulatory uncertainty, Ethereum is benefiting from a shift in sentiment, particularly among institutional investors. We have highlighted several factors behind the sharp reversal:

Ethereum ETF Approval Momentum

The U.S. Securities and Exchange Commission (SEC) recently showed a more receptive stance toward Ethereum-based ETFs. With spot Ethereum ETFs now approved for listing on major exchanges, investors are viewing the asset as more legitimate and accessible. These ETFs provide an easy entry point for institutions looking to gain exposure to cryptocurrency without holding the token directly, fueling broader adoption.

Stablecoin Optimism and Tokenization Trends

The rapidly evolving story around stablecoins and tokenization is driving Ethereum inflows. With growing interest from major fintech players like Visa, Mastercard and Stripe, stablecoin-based payment systems are reshaping how public blockchains like Ethereum are viewed. Recent data shows record-high transaction volumes for stablecoins on Ethereum, highlighting its growing relevance in global payments, remittances and decentralized finance.

Staking Anticipation Fuels Further Optimism

Investor interest in Ethereum ETFs is gaining momentum amid growing speculation that the U.S. Securities and Exchange Commission (SEC) may soon permit staking within spot ETH ETFs. A pivotal development came on May 29, when the SEC's Division of Corporation Finance indicated that certain staking activities may not be classified as securities, a nuanced but meaningful shift in regulatory tone.

Invesco has filed for incorporation of staking in its Galaxy Ethereum ETF, joining major players like Fidelity, Grayscale and Bitwise in preparing for a potential green light. If approved, staking could introduce an additional yield component to Ethereum ETFs, significantly boosting their appeal to yield-seeking investors.

Legislative Tailwinds

The U.S. Senate is also playing a role in bolstering Ethereum's investment case. The upcoming GENIUS Act, which aims to regulate stablecoins, could provide the regulatory clarity needed for wider adoption. If passed, it may solidify Ethereum’s role as the infrastructure for compliant stablecoin issuance and transactions, further driving ETF flows.

Risk Sentiment Improves

With inflation data stabilizing and central banks showing signs of easing monetary policies, risk appetite is gradually returning to global markets. Cryptocurrencies, particularly Ethereum, are benefiting from this shift, with investors rotating back into digital assets amid hopes of a new bullish cycle (read: Ethereum ETFs Outperforming in May).

Quick Look at ETHA

iShares Ethereum Trust ETF seeks to reflect the performance of the price of Ethereum. It is managed by the world’s largest asset manager and leverages a multi-year technology integration developed with Coinbase Prime, the world’s largest institutional digital asset custodian. ETHA has AUM of $3.8 billion and trades in an average daily volume of 14.4 million shares. It charges 25 bps in annual fees.