Main Points :
- Second consecutive week of inflows into Ethereum-related investment products, totalling US$149 million, marking US$336 million over two weeks
- Overall digital asset fund flows reach US$2.0 billion in the latest week, pushing three‑week net inflows to US$5.5 billion and year‑to‑date net inflows to US$5.6 billion
- Bitcoin spot ETFs see US$425.5 million in net inflows, extending to a third week of positive flows amid BlackRock and Fidelity‑led buying
- Strategy adds 1,895 BTC (US$180 million) to its holdings, now totalling 555,450 BTC
- SEC postpones decisions on Litecoin, XRP, and Dogecoin ETF proposals, reflecting ongoing regulatory caution
- Institutional staking via Lido controls 27.7 % of staked ETH, offering base yields of 4.8 % and up to 10 % through DeFi integrations
- BlackRock’s iShares Ethereum Trust ETF reports zero inflows since launch, awaiting SEC approval and investor interest
- Upcoming Ethereum network upgrades, including the Pectra upgrade and EIP‑4844 proto‑danksharding, are set to improve scalability and lower gas fees by up to 90 % for Layer 2s
- Vitalik Buterin prioritizes single‑slot finality, statelessness, privacy enhancements, and core infrastructure resilience for 2025 development
- Arthur Hayes calls Ethereum “the most hated layer 1,” yet highlights its security and developer ecosystem as a long‑term strength
Record Inflows into Ethereum Investment Products
According to CoinShares’ Volume 232 report, Ethereum-related exchange‑traded products (ETPs), trusts, and funds attracted US$149 million in net inflows during the week ending May 2, marking the second straight week of positive flows and bringing cumulative two‑week inflows to US$336 million. In contrast, Solana‑based products saw modest inflows of US$6 million, while blockchain equities captured US$15.9 million. This dominance reflects growing institutional confidence in Ethereum’s maturity, driven by its transition to Proof‑of‑Stake and robust staking yields that differentiate ETH from competing Layer 1 networks.
Robust Growth in Overall Digital Asset Fund Flows
Beyond Ethereum, the broader digital asset fund landscape recorded US$2.0 billion in net inflows for the week, lifting three‑week cumulative inflows to US$5.5 billion and boosting year‑to‑date net inflows to US$5.6 billion. Total assets under management (AUM) in digital asset products reached US$156 billion—the highest level since late January—underscoring broad‑based investor appetite. US‑domiciled funds accounted for over 90 % of the latest inflows, highlighting America’s leading role in crypto fund flows, with emerging contributions from European and Canadian venues adding to the momentum.
Bitcoin Spot ETFs Continue to Attract Capital
Bitcoin spot exchange‑traded funds sustained their appeal, drawing US$425.5 million in net inflows on May 5, marking the third consecutive week of positive capital injections. While trailing the previous week’s US$806 million haul, the continued demand underscores firms like BlackRock’s iShares and Fidelity leveraging ETF structures to offer spot BTC exposure. Since their launch in January, these ETFs have accumulated US$40.24 billion in net inflows, with weekly trading volumes moderating to US$13.23 billion—down from US$18.76 billion—indicating a maturing investor base balancing long‑term allocations with tactical trading.
Corporate Bitcoin Accumulation Accelerates
Corporate adoption of Bitcoin as a treasury asset shows no signs of slowing. Strategy (formerly MicroStrategy) disclosed the purchase of 1,895 BTC for US$180.3 million in cash on May 5, boosting its holdings to 555,450 BTC—valued at over US$52 billion at current prices. Strategy’s aggressive accumulation strategy illustrates the growing belief among corporate CFOs that Bitcoin can serve as both a hedge against inflation and a strategic reserve asset, further institutionalizing the asset class beyond financial firms into broader corporate treasuries.
Regulatory Developments and ETF Delays
Regulatory bodies remain vigilant. On May 6, the US Securities and Exchange Commission (SEC) postponed its decision on Canary Capital’s proposed Litecoin ETF, soliciting public comments on novel compliance concerns. This step follows the SEC’s recent delays of XRP and Dogecoin spot ETF applications, now slated for decisions by mid‑June. The pattern of extensions—permitted under the 45‑ to 90‑day review window—reflects the commission’s methodical approach as it balances market innovation with investor protection in a still‑evolving regulatory landscape.
Emerging Institutional Trends in Ethereum Staking
Staking continues to redefine institutional Ethereum exposure. Lido Finance, the largest liquid staking provider, manages 9.41 million ETH—27.7 % of total staked ETH—with a base annual yield of approximately 4.8 %. Through DeFi integrations, stETH holders can access additional yield-generating strategies, pushing effective returns into the 8–10 % range. Liquid staking addresses institutional needs by eliminating the need for 32 ETH minimums, reducing operational risk, and enabling on‑chain participation without locking assets outright—factors that have propelled Lido’s AUM to over US$24 billion.
The Developing Landscape of Ethereum ETFs
Despite robust demand for ETH, spot Ethereum ETFs have yet to mirror Bitcoin’s ETF success. BlackRock’s iShares Ethereum Trust ETF, aimed at tracking ether’s price, reported zero net inflows since its debut as of May 6. Institutional investors appear cautious, awaiting clearer regulatory signals and product performance data before committing significant capital. The SEC’s pending decision on multiple Ethereum ETF filings—including those from Fidelity and Grayscale—will serve as a crucial catalyst for future ETF adoption and may unlock new pools of institutional liquidity.
Ethereum Network Upgrades: Pectra, Dencun, and the Path to Danksharding
Ethereum’s upgrade roadmap is pivotal to sustaining its competitive edge. The Pectra upgrade, rolled out in March 2025, enhanced network scalability and security through protocol optimizations and EIP 4844 ( proto‑danksharding). Proto‑danksharding slashes Layer 2 data fees by up to 90 % by introducing “blobs” for off‑chain data storage, paving the way toward full Danksharding. Full Danksharding aims to exceed 100,000 transactions per second, positioning Ethereum as a scalable settlement layer for a wide array of decentralized applications and cementing its role in the next wave of blockchain innovation.
Thoughts from Industry Leaders
Ethereum co‑founder Vitalik Buterin outlined his 2025 priorities, focusing on single‑slot finality to achieve sub‑12‑second blocks, migrating toward stateless clients, enhancing privacy through zk‑based solutions, and reinforcing core Layer 1 infrastructure. His vision emphasizes not only technical upgrades but also ecosystem resilience, governance improvements, and social coordination to maintain Ethereum’s decentralization ethos.
Arthur Hayes, BitMEX’s co‑founder, recently characterized ETH as “the most hated layer 1,” arguing that contrarian investors should favor assets underappreciated by the market. He praised Ethereum’s Proof‑of‑Stake security model and prolific developer community, suggesting that its current negative sentiment could presage notable upside as fundamentals and user adoption strengthen.
Conclusion
Institutional capital continues to flow into Ethereum and broader crypto funds, even as the SEC exercises caution over altcoin ETFs. Corporate Bitcoin purchases and liquid staking innovations via platforms like Lido offer multiple avenues for institutional participation. With major protocol upgrades like Pectra and proto‑danksharding set to enhance scalability and cost efficiency, Ethereum’s network fundamentals remain strong. As regulatory clarity around spot ETFs improves later in 2025, both ETH and BTC are poised to benefit from deepened institutional engagement and evolving market infrastructure.
