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.