Ethereum ETF One Year Anniversary: From Slump to Prosperity, Institutional Investment Confidence Significantly Increased

Three months ago, even the most enthusiastic supporters of Ethereum could hardly imagine that the U.S. Ethereum exchange-traded fund (ETF) would celebrate its one-year anniversary. However, today the Ethereum ETF is迎来 its shining moment, having been trading for a full year since its launch on July 23, 2024.

In June 2025, the Ethereum ETF achieved the best monthly performance in history, with inflows exceeding $3.5 billion, 70% higher than the previous peak of $2.08 billion in December 2024. The inflow momentum in July has been even stronger, surpassing $3 billion to date, and is expected to exceed June’s figures. The past two weeks ending July 18 have been the best two weeks for net inflows; moreover, there have been no net outflows for ten consecutive weeks, which is the first time in its 52-week existence.

However, the development of the Ethereum ETF has not been smooth sailing.

In May 2024, U.S. regulators approved the Ethereum ETF, which officially began trading on July 23 of the same year. At that time, market reactions were mixed. After all, the Bitcoin ETF had already captured all the spotlight earlier in the year, making the debut of the Ethereum ETF seem uneventful: price trends were sluggish, attention gradually waned, and there was never a significant influx of capital during the initial launch.

In fact, some of the initial capital flows even showed a net outflow.

In the trading of the first 39 weeks, the Ethereum ETF had net inflows in only 15 weeks; in contrast, in the past 14 weeks, there were net inflows in 13 weeks, highlighting the significant change in trend over the last three months.

By July 21, 2025, the assets under management (AUM) of all Ethereum ETFs in the United States have surpassed $19 billion, doubling from about $9.6 billion two months ago.

Not only ETFs, but institutional interest in Ethereum is also accelerating through the form of “Ethereum reserve assets.”

On June 2, 2025, a certain gaming company became the first publicly listed company in the United States to announce that it would include Ethereum in its strategic reserves. While the crypto community was still focused on a number of publicly listed companies adding Bitcoin to their balance sheets, Joe Lubin had already brought Ethereum into the “reserve asset party.”

As a co-founder of Ethereum and founder and CEO of a company, Lubin joined the board of directors of the gaming company and served as chairman, leading the company’s $425 million Ethereum strategic reserve.

Since the launch of the reserve asset program, this gaming company has become the world’s largest enterprise-level Ether holder, holding 360,807 ETH, worth over $1.3 billion at current prices. In addition, the company has raised an additional $413 million and has earned a total of 567 ETH in rewards through staking its held Ethereum.

Moreover, in the supplementary prospectus submitted to the US SEC, the company requested to increase its available amount of common stock for sale from the initially reported $1 billion to $5 billion.

However, a newly established company focusing on Ethereum reserve assets is in fierce competition with it.

A certain Bitcoin mining company is also betting on Ethereum, holding over 300,000 ETH, which is worth over $1 billion at current prices. Its chairman, Tom Lee, is a seasoned Wall Street professional, and he has bigger goals:

“We are steadily advancing our goals, planning to acquire and stake 5% of the total supply of Ethereum.” Currently, the total amount of Ethereum held by these two companies has surpassed that of the Ethereum Foundation.

Overall, the capital flows of Ethereum reserve asset companies and ETFs reflect the confidence of institutions in viewing Ethereum as an infrastructure layer for investment, and this confidence continues to grow.

A well-known investment firm recently reduced its holdings in a cryptocurrency exchange platform and a gaming company, instead increasing its stake in the aforementioned mining company, with an investment amounting to $182 million. The investment firm previously had insufficient exposure to Ethereum and restructured its three flagship ETFs, allocating 1.5% of its portfolio to the mining company.

Billionaire Peter Thiel also holds 9.1% of the company’s shares.

The new company Ether Machine, formed through the merger of existing companies, will create a publicly traded platform that provides institutional investors with professional-grade access to Ethereum infrastructure and Ether returns.

The company was co-founded by Andrew Keys, a former board member and head of a blockchain company, and David Merin, a former executive of that company and the current CEO of Ether Machine. After the merger, Ether Machine plans to go public on Nasdaq, at which time it will hold over 400,000 ETH, valued at over $1.5 billion.

What changes have occurred in the past few months? The recent leadership changes at the Ethereum Foundation may be one of the reasons.

At the end of April 2025, the Ethereum Foundation underwent a leadership restructuring, separating the board from the management team. The new leadership clarified three core priorities: expanding the Ethereum base layer, optimizing Layer2 Rollup, and enhancing user experience.

The practical value and profitability of Ethereum also make it an extremely attractive target for investors.

Currently, there are no ETFs in the United States offering staking rewards, and the U.S. Securities and Exchange Commission (SEC) has not approved any. If an Ethereum ETF is eventually launched with staking capabilities, ETH is expected to become the “digital bond” in institutional portfolios.

ETFs that support staking may provide a native yield of 3%-5%. Based on the current $19.6 billion Ethereum holdings, even with an average yield of 4%, ETF issuers could earn over $750 million in staking revenue.

A large asset management company is exploring product structures that include staking, as mentioned in its submitted 19b-4 amendment document, which explicitly states that staking is a “potential future feature pending regulatory approval,” and the market is watching closely.

Experts predict that the staking function of the Ethereum ETF is expected to be approved in the fourth quarter of this year.

For many investors, staking may be the key distinction between “shallow allocation” and “deep participation.” Passive income derived from compliant investment instruments may attract pension funds, endowment funds, and sovereign wealth funds to enter the market.

A certain market maker and trading company pointed out in a report released last year when the Ethereum ETF was launched that the lack of a staking mechanism is a major shortcoming, which could “diminish the attractiveness of Ethereum as an ETF vehicle.”

If the macro environment changes, such as interest rate cuts, stabilization of inflation, or capital seeking higher returns, Ethereum will become a highly competitive choice: it combines the scarcity of supply deflation, the yield brought by staking, and the accessibility achieved through ETFs and custodians.

The price of Ethereum has shown a correlation with institutional activity. A further breakthrough in price may trigger market optimism and attract more capital inflow. In any case, after a long period of silence, the evolution of Ethereum will be welcomed by both retail and institutional investors.

In the past two weeks, the price of Ethereum has surged over 50%, reaching a new high for 2025; the cumulative increase over the past three months is 150%.

When an ETF issues new shares, it must buy ETH, which will lock up the supply. The decrease in circulating ETH in the market will create upward pressure on the price.

It is expected that the Ethereum Reserve Asset Company will also firmly hold ETH. Registered Investment Advisors (RIA), wealth management institutions, and publicly listed companies typically do not pursue short-term gains and are rarely prone to panic selling.

The reserve asset builders are positioning ETH as a programmable collateral, an asset that can generate yield, provide security, and maintain stability.

In addition, the macro background is also favorable: the “GENIUS Act” was recently signed into effect, legalizing stablecoins as digital cash. Ethereum, as the dominant network with a 50% market share, will be the biggest beneficiary.

So, how will it develop in the future?

Once the SEC approves the ETF staking feature, institutional interest is expected to continue to heat up. More companies may establish Ethereum reserve assets due to the staking feature, and large asset management institutions will further increase their investment allocation in Ethereum.

For traditional investors, they may realize at this moment: Ethereum now has two powerful circulation channels - ETF and reserve assets. Both lock in supply and expand Ethereum’s influence into the traditional economic realm.

Those who directly compare Bitcoin with the reserve assets of Ether and ETFs actually overlook the core differences:

Bitcoin is regarded as a store of value and is referred to as “digital gold” in macro strategies; while Ethereum is given practical use. Fund issuers and reserve asset builders buy and support ETH, valuing its added benefits: staking rewards, infrastructure framework, and its programmable layer as a financial application.

Bitcoin is a “holding-type” asset, while Ethereum is an “application-type” network.