Institutional Investors Capitalize on ETH Dip as Spot ETF Inflows Turn Positive

Institutional investors are seizing the opportunity to buy the dip as spot Ethereum exchange-traded funds (ETFs) experience a resurgence in positive inflows, a trend not mirrored by Bitcoin funds.

Following a significant market crash that saw Ethereum's value plummet by 23% within 24 hours, U.S. spot Ethereum ETFs reported a positive day of inflows. On August 5, the combined inflow for the nine newly launched spot ETH ETFs reached $49 million, marking the second-highest inflow day since these funds began trading.

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This surge represents only the fourth day of inflows over the past ten trading days, indicating that institutional investors are indeed taking advantage of the Ethereum dip. ETF specialist James Seyffart confirmed this trend in a post on X on August 6, stating, “ETF investors, in aggregate, likely bought the dip on Ethereum today.”

Ethereum Dip Buyers

Leading the inflows was BlackRock’s ETHA fund, which saw $47.1 million, bringing its total fund flow to $760 million. VanEck’s ETHV fund followed with an inflow of $16.6 million, closely trailed by Fidelity’s FETH with $16.1 million. The Bitwise ETHW fund received $7.2 million, while Grayscale's Ethereum Mini Trust (ETH) garnered $7.6 million. Conversely, the main Grayscale ETHE fund experienced an outflow of $46.8 million, the lowest since its conversion to a spot ETF. Source: Farside

In contrast, Bitcoin funds did not see similar dip buying activity, recording an outflow of $168.4 million on Monday, according to preliminary data from Farside Investors. Fidelity, Ark 21Shares, and Grayscale each reported outflows between $58 million and $70 million, while BlackRock and four other funds recorded no flows. However, Grayscale’s Mini Bitcoin Trust saw a minor inflow of $21.8 million, with Bitwise (BITB) and VanEck (HODL) each receiving around $3 million.

Bitwise CIO Matt Hougan commented on the dip buying activity for both their funds, noting a stronger investor interest in Ethereum.

ETH Price Outlook

Ethereum markets faced a severe downturn, with the asset dropping to its lowest price in 2024 at $2,171 on August 5. This represented the steepest and quickest decline in ETH prices since May 2022, with the asset losing 34% of its value in less than a week.

However, signs of recovery appeared during the Tuesday morning Asian trading session, with ETH reclaiming the $2,500 mark. For the uptrend to continue, Ethereum needs to break the resistance at $2,900, though this may take some time, especially if Bitcoin's recovery remains sluggish.

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