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ETH ETF Inflows Are Surging. Why Aren't You Seeing the Gains?

  • Inflows into Ethereum (ETH) ETFs have been increasing due to BlackRock's aggressive promotion to diversify crypto exposure.
  • Despite the surge in ETH ETF inflows, the price of ETH has not seen significant gains against Bitcoin since the beginning of the year.
  • The discrepancy in ETH's price performance is attributed to Ethereum's tokenomics, scale, and institutional money flow dynamics.
  • Ethereum's tokenomics create more tokens than can be burned when users are not transacting on the base layer, leading to selling pressure from stakers and recipients.
  • Upgrades on Ethereum often prioritize reducing fees and improving functionality rather than focusing on mechanisms that would drive token value or scarcity.
  • Despite recent inflows into ETH ETFs surpassing Bitcoin, the total inflows of $3.6 billion over one year do not significantly impact Ethereum's $340 billion market cap.
  • The ETH ETF is seen as a pass-through from institutions to stakers and developers, bypassing direct impact on ETH holders.
  • The suggested strategies for engaging with Ethereum involve staking for passive rewards, developing profit-generating applications, or trading ETH tokens directly, rather than investing in the ETF.

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