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United States-based Ethereum (ETH) spot exchange-traded funds (ETFs) saw $393 million worth of inflows this month.
Farside Investors data shows that U.S. Ethereum spot ETFs recorded a cumulative net inflow of $393 million this month, a sevenfold increase over January.
Furthermore, in February, United States-based ETH spot ETF products saw a net outflow only on 10 Feb and 12 Feb. — of $22.5 million and $40.9 million, respectively. At the time of writing, Ethereum is trading at about $2,700 after seeing its price fall by 2.85 % over the last 24 hours and gaining 1.22% over the last seven days.
The details
The world’s first cryptocurrency, Bitcoin (BTC), on the other hand, saw a net outflow of $376 million this month, according to Farside Investors data. Weak sentiment has been plaguing Bitcoin, with these financial products recording net outflows for four days in a row.
The Crypto Fear & Greed Index, a multifactorial measure of crypto market sentiment, currently indicates a level described as “neutral.” The index stands at 47, indicating that the crypto market is now mostly in a neutral state, with a slight tendency towards fear.
The pivot to Ethereum is partly attributed to carry trading, a strategy that consists of acquiring spot ETH ETFs and shorting the Chicago Mercantile Exchange’s (CME) Ethereum futures at the same time. As reported a week ago by crypto news outlet Coindesk, hedge funds held record short positions in the CME ETH futures.
The outlet already explained at the time that “carry trades or arbitrage plays primarily drive the record short interest.” Thomas Erdösi, head of product at CF Benchmarks, said at the time:
“There is evidence suggesting that a notable portion of the short interest in Ether futures is tied to the carry trade. Despite macro headwinds and Ether’s relative underperformance, U.S. ETH ETF inflows have remained steady over the past three months, coinciding with an increase in futures short interest—potentially signaling an uptick in basis trades.”
