Key Takeaways
How have ETFs impacted institutional demand for Bitcoin and Ethereum?
The launch of BTC and ETH ETFs in 2024 has driven record-high institutional inflows and allocations to both assets.
Why are institutions increasingly favoring Ethereum over Bitcoin?
Ethereum’s yield-bearing infrastructure and expanding role in DeFi have made it a preferred core holding for institutional investors.
Since the launch of the first Bitcoin [BTC] and Ethereum [ETH] in 2024, the crypto market has seen a significant transformation.
Institutional demand for BTC and ETH has reached record levels, with capital inflows and allocations to these assets surging dramatically.
Bitcoin’s institutional portfolio post ETFs
Following the launch of Bitcoin’s Spot ETFs in early 2024, major market players have taken the opportunity to invest in BTC.
In fact, the Total Net assets of U.S. spot Bitcoin ETFs have surpassed $149 billion, reflecting sustained demand.
Equally, Total Net Inflows have peaked at 638.36k, with a trading volume of $4.41 billion, and the funds continue to record daily inflows.
Source: CoinMarketCap
Amid this scramble for BTC, BlackRock dominates the space through iShares Bitcoin Trust [IBIT], which manages $88.6 billion in assets under management (AUM).
Since January 2024, IBIT’s Bitcoin holdings have skyrocketed from 2,600 BTC to 805,200 BTC, highlighting a substantial increase in institutional capital allocated to Bitcoin.
Source: Bitbo
In second place is Fidelity’s FBTC, with $21.35 billion in AUM, followed closely by Grayscale’s GBTC, with $19.7 billion.
Since January 14, 2024, BTC holdings for FBTC have surged from 5k to 199K BTC. However, GBTC holdings have dropped massively from 615k to 173k BTC.
ETH ETFs allocations
Before ETF approval, Ethereum had little to no institutional backing. Since then, tides have shifted massively, with Ethereum turning institutions’ favorite in 2025.
In fact, through ETFs, massive capital has flowed into Ethereum since late 2024, when they were first approved. As such, Ethereum ETFs currently hold $22.87 billion in AUM with $1.8 billion in trading volume.
Just like BTC, BlackRock leads the race, with ETHA’s $15.7 billion in AUM. The firm holds 3.99 million ETH worth $16.38 billion, at press time.
Source: Arkham
Grayscale’s ETHE ranks second among Ethereum ETFs, managing $3.46 billion in assets and holding 2.03 million ETH.
In third place is Fidelity’s FETH, with $1.34 billion in assets under management and 1.56 million ETH in holdings.
Source: TheBlock
Shifting institutional allocations
Although Bitcoin has attracted more capital inflows than Ethereum since ETF approval, the pace of growth has shifted significantly.
Data from Cryptoquant shows that Bitcoin fund holdings have increased by 36% over the past year, reaching 1.3 million BTC.
Such a surge reflects increased institutional accumulation for BTC. Over the same period, however, Ethereum Fund Holdings has experienced a sharper expansion.
Source: CryptoQuant
In fact, Ethereum Fund Holdings has experienced a 138% year-over-year increase, reaching 6.8 million ETH.
The rise in holdings aligns with the scaling of ETH ETFs, the growth of staking, Ethereum’s role in tokenization, layer-two networks, and DeFi settlement.
Source: CryptoQuant
Thus, within a year, Ethereum fund holdings relative to BTC have surged from 3x to 5x. This indicates a complete reallocation driven by different market dynamics.
Bitcoin remains a digital monetary asset, limiting its potential, while Ethereum sits as a yield-bearing network infrastructure.
Thus, institutional investors are increasingly favoring ETH over BTC, viewing it as a core holding rather than a secondary allocation.
Implications for the market
Both Ethereum and Bitcoin have seen substantial long-term capital inflows through ETFs. However, as Bitcoin becomes more expensive post-ETF launch, institutional investors are increasingly shifting capital toward Ethereum.
This shift sets the stage for an ETF-driven capital catalyst. For Ethereum, growing institutional investment is expected to flow into DeFi, potentially boosting returns.
As a result, ETH is likely to demonstrate greater price stability, with institutions playing a key role in shaping its market behavior.
Meanwhile, every dollar invested in BTC ETFs adds significant value to the broader market.
If Ethereum ETFs continue gaining momentum and match Bitcoin’s inflows, they could lock in billions of dollars, driving the crypto market to new highs by year-end.