Ether (ETH) has been lagging behind bitcoin (BTC) in terms of performance this year, but recent trends in ETF inflows suggest that this period of underperformance could be coming to an end, according to a recent report from Bernstein.
The report highlighted that Blackrock’s spot ether ETF saw an influx of $250 million in inflows on Friday, compared to just $137 million into its spot bitcoin ETF. This surge in ether ETF inflows creates favorable supply-demand dynamics, signaling potential for ETH to begin outperforming bitcoin, the analysts noted.
The report also pointed to staking yields as another potential catalyst for ETH’s price growth. Bernstein explained that although initial ether ETF applications did not include staking yields due to regulatory restrictions, the shift toward a more crypto-friendly SEC under the new administration could lead to the approval of staking yields for ETH. As Ethereum blockchain activity continues to grow, staking yields could increase to 4-5%.
Since Ethereum’s transition to a proof-of-stake consensus mechanism, the supply of ether has remained stable at 120 million tokens. Ethereum’s transaction fees currently generate a yield of around 3% for stakers, with 28% of the total ether supply locked in staking contracts. Another 10% is tied up in deposit and lending contracts.
With almost 60% of ether remaining untouched over the last 12 months, the network boasts a resilient investor base, further strengthening the favorable demand-supply dynamics for ETH, the report concluded.
