Citi: Ether Rally Driven by ETF Inflows and Strong On-Chain Activity
Ether (ETH) has mounted a sharp recovery, rising nearly 30% year-to-date, as demand for spot ETH exchange-traded funds (ETFs) accelerates and on-chain fundamentals improve, according to a Tuesday report by Citi.
After falling more than 55% earlier this year amid macro headwinds, ETH is now reclaiming market share from bitcoin (BTC) — a reversal of prior trends. Analysts at Citi say the shift is being led by significant inflows into spot ETH ETFs, which have surged to over $13 billion, up from $2.6 billion in April.
Citi’s Alex Saunders and Nathaniel Rupert noted that rising ETF balances are now playing a direct role in price dynamics. Treasury entities have also been actively accumulating ETH since May, with total holdings nearing $10 billion in value.
Meanwhile, blockchain data shows large wallets accumulating ETH while smaller holders reduce exposure. Exchange balances continue to decline, indicating a return of supply to cold storage or DeFi protocols — a trend that may be driving the current rally via reduced sell-side liquidity.
The bank emphasized that the rally isn’t just speculative. On-chain activity has picked up, reinforcing the move with stronger fundamentals. With supportive macro conditions and clearer regulatory signals, Citi believes ETH’s resurgence could continue.
