Spot Ethereum ETFs have outpaced their Bitcoin counterparts, raking in $240 million in net daily inflows on Wednesday, June 11.

This figure eclipsed the $164 million flowing into BTC ETFs, marking the first time Ethereum products have led daily inflows since the launch of U.S. spot crypto ETFs 18 months ago.

Ethereum Breaks Through

The shift, hailed by analysts and echoed across social media, is seen by some as a potential turning point in institutional crypto adoption, fueled by unique catalysts driving capital towards the second-largest digital asset.

“As far as I can remember, this is the first time this has happened,” noted prominent crypto commentator CryptoMe in a post on X, highlighting the historic nature of the flows.

Data compiled by SoSoValue shows a consistent trend building over recent weeks. Ethereum ETFs have now enjoyed 18 consecutive days of net inflows, culminating in the near-record $240.29 million haul. The crypto-linked investment products now boast $3.74 billion in cumulative net inflows, $830.98 million in total daily trading volume, and $11.05 billion in net assets, making up roughly 3.25% of Ethereum’s market cap.

The top performer, BlackRock’s ETHA, contributed just over $163 million on June 11 alone and leads all Ethereum ETFs with $5.13 billion in cumulative inflows.

In comparison, while still dominant in absolute terms, spot BTC ETFs appear to be facing diminishing momentum. Despite some $45 billion in cumulative inflows and almost $132 billion in assets under management (AUM), net inflows have softened over the past week. After a mid-week rally on June 10, where the ETFs brought in $431.12 million, flows tapered off, dropping to $164.57 million on June 11.

Even BlackRock’s flagship IBIT, which recently shattered records by becoming the fastest ETF in history to surpass $70 billion in AUM, is now experiencing moderated daily volumes, down to $1.89 billion yesterday.

Regulatory Clarity, DeFi Potential Spark Inflows

Market watchers have pointed to a combination of factors to explain Ethereum’s sudden surge in the spot ETF space. These include optimism in the decentralized finance (DeFi) sector following recent remarks by U.S. Securities and Exchange Commission (SEC) Chair Paul Atkins directing the agency to explore rule amendments to accommodate on-chain financial systems.

Other key drivers include a perception of ETH as an undervalued asset as well as institutional spillover from Bitcoin ETFs. Regulatory clarity, particularly regarding Ethereum’s classification, appears to be easing institutional hesitancy.

Furthermore, ETH’s stronger recent price performance, up 5.4% over the past week compared to BTC’s 2.9% gain, and 12% over the last month versus the king cryptocurrency’s 4.9%, is reinforcing the undervaluation narrative, especially with Bitcoin trading just 3.8% below its recent all-time high while Ethereum remains 43.5% below its peak.

Cardano’s ADA token surged 11%, outperforming bitcoin (BTC) and ether (ETH), after Grayscale Investments applied for the first-ever spot ADA exchange-traded fund (ETF) in the U.S.

ADA jumped to 80 cents, with the move starting late Wednesday, according to CoinDesk data. However, the ninth-largest cryptocurrency by market value, is still down 36% from its December high of around $1.37.

Grayscale, a prominent crypto asset manager, filed to list the first ever spot ADA fund on the New York Stock Exchange. A spot ETF would enable investors to gain exposure to the cryptocurrency without having to own it directly.

Bitcoin and ether spot ETFs began trading in the U.S. last year, attracting billions in investor funds since their inception and bolstering the narrative of institutional adoption.

Note that the U.S. SEC’s approval of spot BTC and ETH ETFs was primarily based on the assumption that the CME’s surveillance system for bitcoin and ether futures would mitigate concerns about price manipulation. In other words, CME futures have been a prerequisite for obtaining spot ETF approval. The global derivatives giant is yet to list ADA futures.

The market doesn’t seem worried about that, as evidenced by ADA’s price spike.

Focus on Layer 1 coins

The cryptocurrency and its Layer 1 peers like BTC, ETH, SOL and others could remain well supported in days ahead as social media chatter suggests a shift in investor bias from memecoins to layer 1 coins, according to analytics firm Santiment.

“The crypto community has largely shifted their attention to Bitcoin and other Layer 1 assets like Ethereum, Solana, Toncoin, and Cardano. Collectively, the top Layer 1 assets are getting 44.2% of discussions among specific coins. Meanwhile, top meme coins like Dogecoin, Shiba Inu, and Pepe are being discussed less and less across social media,” Santiment said on X.

“A shift in trader attention from meme coins to Bitcoin and Layer 1 assets is generally a sign of a more stable and sustainable market environment,” Santiment added.

BTC in stasis

Bitcoin continues to trade lacklustre between $95,000 to $100,000, with upside likely capped by trade war fears and rising inflation expectations in the U.S. Ether, the second-largest token by market value, has been locked between $2,500-$2,900 since recovering from last Monday’s crash to $2,000 on several exchanges.

Macro traders have recently pivoted to gold, sending the yellow metal’s price to all time highs above $2,900 per ounce.

Some analysts said bitcoin will have the last laugh.

“The recent decrease in volatility, coupled with the rising price of gold, should highlight Bitcoinʼs growing appeal as an alternative store of value. Despite short-term fluctuations, Bitcoinʼs fundamental narrative remains intact, with increasing institutional interest and its positioning as a potential hedge against inflation and currency devaluation continuing to support its long-term potential,” analysts at Bitfinex said.

“A shift [away from gold] may be underway. Over $196 billion worth of Bitcoin is now held by ETFs, public and private companies, and even nation states. With central banks expanding money supply and fiat devaluation risks rising, Bitcoinʼs fixed-supply narrative is becoming increasingly attractive,” analysts added.