Author: Prathik Desai
Translated by: Saoirse, Foresight News
Original Title: EthereumETF One Year Anniversary: From Cold Reception to Explosion, Institutional Confidence Shift Behind Capital Flows
Three months ago, even for the most ardent Ethereum supporters, the idea of celebrating the one-year anniversary of the Ethereum ETF in the United States seemed like a far-fetched fantasy.
However, today the Ethereum ETF is experiencing its moment of glory - having been in trading for a full year since its first launch on July 23, 2024.
In June 2025, the Ethereum ETF achieved its best monthly performance in history, with capital inflows exceeding $3.5 billion, 70% higher than the previous peak of $2.08 billion in December 2024. The momentum in July is even stronger, with inflows already surpassing $3 billion and potentially exceeding June. The past two weeks have been the best in terms of net capital inflows, and for the first time in its 52-week existence, it has not experienced any net outflows for ten consecutive weeks.
The "hockey stick" growth curve in the image below vividly illustrates this trend.
However, the development of the Ethereum ETF was not smooth sailing.
In May 2024, U.S. regulators approved the Ethereum ETF, and it officially began trading on July 23 of the same year, with mixed market reactions. After all, the Bitcoin ETF had already stolen the spotlight earlier in the year, and the Ethereum ETF's debut was relatively unremarkable: price trends were sluggish, attention gradually decreased, and there was no significant capital inflow during the initial period.
In fact, some initial capital flows even showed net outflows.
In the first 39 weeks of trading, the Ethereum ETF only achieved net capital inflows in 15 weeks; in contrast, over the past 14 weeks, 13 weeks showed net inflows, demonstrating the dramatic shift in direction over the past three months.
As of July 21, 2025, the AUM of all Ethereum ETFs in the United States has exceeded $19 billion, doubling from about $9.6 billion two months ago.
Beyond ETFs, institutional interest in Ethereum is also accelerating through "Ethereum reserve assets".
On June 2, 2025, SharpLink Gaming became the first U.S. listed company to announce the inclusion of Ethereum in its strategic reserves. While the crypto world was still focused on companies adding Bitcoin to their balance sheets, Joe Lubin had already brought Ethereum into the "reserve asset party".
As the co-founder of Ethereum, founder and CEO of ConsenSys, Lubin joined SharpLink Gaming's board of directors as chairman and led the company's $425 million Ethereum strategic reserve.
Since the launch of this reserve asset plan, SharpLink has become the world's largest enterprise-level Ethereum holder, with 360,807 ETH, valued at over $1.3 billion at current prices. Additionally, the company raised an extra $413 million and accumulated 567 ETH in staking rewards from its held Ethereum.
Moreover, in a supplementary prospectus submitted to the U.S. SEC, SharpLink requested to increase its ordinary share saleable amount from the initially declared $1 billion to $5 billion.
However, a new company entering the Ethereum reserve asset space is fiercely competing with them.
Bitcoin mining company BitMine Immersion is also betting on Ethereum, holding over 300,000 ETH, valued at over $1 billion at current prices. Its chairman, Tom Lee, a Wall Street veteran, has even bigger ambitions:
"We are steadily advancing our goal, planning to acquire and stake 5% of Ethereum's total supply." Currently, the total Ethereum holdings of SharpLink and BitMine already exceed those of the Ethereum Foundation.
Overall, the capital flows of Ethereum reserve asset companies and ETFs collectively reflect institutional confidence in Ethereum as an infrastructure layer, and this confidence continues to strengthen.
Cathie Wood's ARK Invest recently reduced its holdings in Coinbase and Roblox, instead increasing its investment in BitMine Immersion to $182 million. ARK, which previously had insufficient Ethereum exposure, restructured its three flagship ETFs, allocating 1.5% of its portfolio to BitMine.
Billionaire Peter Thiel also holds 9.1% of the company's shares.
The newly formed company Ether Machine, created through the merger of existing companies, will build a public trading platform providing institutional investors with professional channels to access Ethereum infrastructure and Ether yields.
The company was co-founded by Andrew Keys, former Consensys board member and director, and David Merin, former ConsenSys executive and current CEO of Ether Machine. After the merger, Ether Machine plans to be listed on NASDAQ, at which point it will hold over 400,000 ETH, valued at over $1.5 billion.
What changes have occurred in the past few months? The recent leadership changes at the Ethereum Foundation might be one reason.
In late April 2025, the Ethereum Foundation adjusted its leadership, separating the board and management. The new leadership clearly defined three core priorities: expanding Ethereum's base layer, optimizing Layer 2 Rollup solutions, and improving user experience.
Ethereum's practical value and earning potential have also made it an extremely attractive target for investors.
Currently, no U.S. ETF offers staking rewards, as the SEC has not yet approved it. If the Ethereum ETF eventually introduces staking functionality, ETH could become a "digital bond" in institutional investment portfolios.
ETFs supporting staking could potentially offer 3%-5% native yields. Based on the current $19.6 billion Ethereum holdings, even with an average yield of 4%, ETF issuers could generate over $750 million in staking income.
BlackRock is already exploring product structures that include staking, with its 19b-4 amendment filing explicitly mentioning that staking is a "potential future feature pending regulatory approval", and the market is watching closely.
Experts predict that the staking functionality for Ethereum ETFs may be approved in the fourth quarter of this year.
@JSeyff
For many investors, staking could be the key difference between "shallow allocation" and "deep participation". Passive income obtained through compliant investment tools may attract pension funds, endowment funds, and sovereign wealth funds.
Market maker and trading firm Wintermute noted in a report when the Ethereum ETF was launched last year that the lack of a staking mechanism was a major weakness that could "diminish Ethereum's attractiveness as an ETF vehicle".
If the macroeconomic environment changes, such as interest rate cuts, stabilized inflation, or capital seeking higher returns, Ethereum would become an extremely competitive choice: it combines the scarcity of deflationary supply, the yield from staking, and accessibility through ETFs and custodial institutions.
Ethereum's price has already shown correlation with institutional activity. Further price breakthroughs might trigger market optimism and attract more capital inflows. Regardless, after a long period of dormancy, Ethereum's evolution will be welcomed by both retail and institutional investors.
In the past two weeks, Ethereum's price has surged over 50%, reaching a new high in 2025; over the past three months, the cumulative increase has been 150%.
When the ETF issues new shares, ETH must be bought, which will lock in the supply. The reduction of ETH in circulation will create upward price pressure.
It is expected that the Ethereum reserve asset company will also firmly hold ETH. Registered investment advisors (RIA), wealth management institutions, and listed companies typically do not pursue short-term gains and rarely engage in panic selling.
Reserve asset builders are positioning ETH as a programmable collateral, an asset that can generate returns, provide security, and remain stable.
Moreover, the macro background is favorable: the GENIUS Act was recently signed into effect, legalizing stablecoins as digital cash. As the leading network with a 50% market share, Ethereum will become the biggest beneficiary.
So, how will it develop in the future?
Once the SEC approves the ETF staking function, institutional interest is expected to continue warming up. More enterprises may establish Ethereum reserve assets due to the staking function, and asset management institutions like BlackRock will further increase their investment allocation in Ethereum.
For traditional investors, they may now realize that Ethereum already has two powerful circulation channels - ETF and reserve assets. Both lock in the supply and extend Ethereum's influence to traditional economic fields.
Those who directly compare Bitcoin and Ethereum's reserve assets and ETFs actually overlook the core differences:
Bitcoin is viewed as a value storage tool, the "digital gold" in macro strategies; while Ethereum is endowed with practical uses. Fund issuers and reserve asset builders buy and support ETH, valuing its added value: staking rewards, infrastructure framework, and the programmable layer for financial applications.
Bitcoin is a "holding" asset, while Ethereum is an "application" network.
