The Institutional Pivot to ETH ETFs and Treasuries

James McKay
4 days ago
5 min read

Updated: 3 days ago

As the crypto market matures, investors are increasingly looking beyond Bitcoin, the premier digital asset that has already firmly established itself as a macro hedge akin to gold. Ethereum, the second-largest crypto by market capitalisation, has been experiencing a notable resurgence in institutional interest in 2025, driven by the rapid growth of Ethereum Exchange-Traded Funds (ETFs) and the adoption of ETH in corporate treasuries. This shift reflects a growing recognition of Ethereum’s role as a programmable blockchain powering decentralised finance (DeFi), non-fungible tokens (NFTs), and tokenization infrastructure. This article explores these latest trends, and highlights how Ethereum is cementing its place in diversified crypto investment strategies.

The resurgence of Ethereum ETFs

Despite being overshadowed by their Bitcoin equivalents since their SEC approval in July 2024, US-based spot Ethereum ETFs have emerged as powerful vehicles for institutional and retail investors to gain exposure to ETH, without the complexities of direct ownership.

Recent weeks have seen a significant surge in interest and a corresponding rise in Ethereum ETF inflows, during which time they have outpaced their Bitcoin counterparts, pointing to strengthening investor confidence and a potential influx of capital back into ETH.

A standout example is BlackRock’s iShares Ethereum Trust ETF (ETHA), which recently hit $10 billion in assets under management (AUM) in its first year, making it the third-fastest ETF to reach this milestone, trailing only BlackRock’s Bitcoin ETF (IBIT) and Fidelity’s FBTC Bitcoin ETF (chart below). Notably, ETHA doubled its AUM from $5 billion to $10 billion in just 10 days, reflecting a surge in investor confidence.

Recent data from Farside Investors shows that spot Ethereum ETFs generated $1.8 billion in net inflows over a single week in July 2025, and have continued on a 19-day positive streak as of July 31. In contrast, Bitcoin ETFs added just $70 million in the same period, highlighting Ethereum’s dominance in crypto ETF flows. Since their launch, Ethereum ETFs have accumulated over $5.9 billion in inflows, and have netted a 125% increase in ETH ETF AUM over the past two months.

Additionally, the SEC’s approval of “in-kind” creation and redemption for Ethereum ETFs on July 29, 2025, will further enhanced their appeal. This mechanism, aligned with traditional commodity-based ETFs, improves capital efficiency, reduces tax burdens for institutional investors, and deepens market liquidity. We expect this to attract new institutional capital and pave the way for additional crypto ETF products.

The corporate pivot to Ethereum

Beyond ETFs, Ethereum is gaining traction as a treasury reserve asset, reflecting a broader shift in corporate strategies toward diversified digital asset holdings. 64 entities now hold some 2.7 million ETH ($10.1 billion), signaling a move away from Bitcoin-centric strategies. This trend is driven by Ethereum’s unique value proposition as a programmable blockchain powering DeFi, NFTs, as well as tokenisation infrastructure.

Public companies like BitMine Immersion and SharpLink Gaming have allocated significant funds to purchase ETH, contributing to Ethereum’s institutional adoption. For instance, SharpLink recently disclosed plans to integrate ETH into its treasury, citing its potential for long-term value appreciation and utility in blockchain-based applications. These moves mirror the Bitcoin treasury strategies pioneered by firms like MicroStrategy, which recently hit a $127 billion market cap, but Ethereum’s programmability offers additional use cases that appeal to forward-thinking corporations.

At the same time, the diversification of treasury assets beyond both Bitcoin and Ethereum is showing increased momentum. Bit Origin’s plan to raise $500 million to acquire Dogecoin marks a bold move, positioning it as the first US-listed firm to adopt DOGE as a core treasury asset. While such strategies carry higher risks due to the volatility of meme coins, they reflect the growing appetite for crypto exposure across the spectrum of digital assets.

It is important to note that recent regulatory developments are arguably having a much more significant impact on Ethereum compared wiht Bitcoin. For example, the passage of the GENIUS Act, which provides a regulatory framework for dollar-pegged stablecoins, is expected to increase demand for Ethereum due to its large share in the stablecoin market capitalisation (2nd behind Tron), as well as the volume of activity currently hosted on the network. It will also provide regulatory clarity, encouraging institutional investment in stablecoin-based DeFi applications.

Finally, that approval of staking for US Ethereum ETFs, expected to be finalised in 2025, could further boost liquidity and on-chain activity, offering institutional investors yields of up to 10%.

Is Altcoin season ahead?

Crypto market cycles typically see capital flow from Bitcoin to Ethereum, and then into smaller altcoins as investors seek higher returns, a pattern commonly known as the "altcoin rotation." However, the current cycle has notably deviated: Bitcoin has maintained its dominance and achieved new highs, while broader altcoin outperformance remains more subdued than in previous cycles.

Here, the current renewed interest in Ethereum will have implications for a potential altcoin season, particularly if Ethereum’s broader ecosystem sees increased adoption. As shown below, The 6% decline in Bitcoin dominance (the % market share of BTC vs. total crypto market) seen in mid-July, along with a 28% rise in the ETH/BTC ratio, suggests ETH's return to fair value may be underway which is an all-important catalyst for smaller-cap crypto assets.

Other indicators also point to a potential inflection point. For example, the Altcoin Season Index from CoinMarketCap, which tracks whether the crypto market is in an altcoin bull based on the performance of the top 100 altcoins relative to BTC, is tracking above 50 and starting to show altcoin bias.

A pullback in ETH could reverse recent altcoin gains, repeating a familiar pattern. However, if ETH's momentum continues, significant capital could flow into crypto, fueled by a rising M2 and a potential rate cut on the horizon.

ETH's resurgence is here, but institutions must exercise caution

The renewed interest in Ethereum ETFs and treasuries in 2025 reflects a maturing crypto market, with investors moving beyond Bitcoin to embrace Ethereum’s programmable potential. Success in Ethereum treasuries, as with Bitcoin, hinges on disciplined accumulation and a clear long-term vision. Moreover, factors such as staking, growing regulatory clarity, and the rising demand for stablecoins following the GENIUS Act could further increase demand for ETH, driving its adoption and value in institutional portfolios.

Despite this, the cautionary tale of GameStop serves as a reminder of the pitfalls of undisciplined treasury strategies. Without a structured approach, companies risk masking underlying financial weaknesses or succumbing to market volatility.

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Disclaimer: The information contained within is for educational and informational purposes ONLY. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision. No commercial relationships or partnerships exist with any of the technology providers, manufacturers, or suppliers herein.