December marked a historic month for spot Ethereum (ETH) exchange-traded funds (ETFs) in the United States, with net inflows reaching $2.1 billion.
This milestone made it the best performing month for Ethereum ETFs since their introduction in July 2024.
Ethereum ETFs Hit New Monthly High in December
According to data from SoSoValue, BlackRock’s Ethereum ETF (ETHA) led the charge in December, seeing $1.432 billion in inflows. Fidelity’s Ethereum ETF (FETH) followed with $752 million, while VanEck’s ETHV came third in December with $12 million in net inflows. While Bitwise managed net positive flows of up to $10 million, Grayscale saw negative flows of $93 million.
On December 31, the Grayscale Ethereum Trust ETF (ETHE) continued its struggles, reporting a single-day outflow of $5.6 million and an overall net outflow of $3.64 billion. Crypto researcher Trader T corroborates this, recording monthly outflows of $274 million for Grayscale’s ETHE in December.
Despite hitting the $2.1 billion milestone, Ethereum ETFs still lag behind their Bitcoin counterparts. BlackRock’s Spot Bitcoin ETF (IBIT) dominated the market in 2024, with net inflows of a staggering $37 billion, significantly ahead of Fidelity’s Bitcoin ETF (FBTC) at $12 billion. In contrast, BlackRock’s Ethereum ETF (ETHA) has accumulated $3.5 billion in inflows in 2024, followed by $1.5 billion from Fidelity.
Even though December’s record performance provided a much-needed boost, 2024 has been a tough year for Ethereum as a whole. According to a report from 10X Research, Ethereum has struggled to maintain its dominance as competing blockchains like Solana and Tron have gained ground. Based on this, among other reasons, 10X Research expressed skepticism about Ethereum’s prospects in 2025.
“The absence of meaningful enablers and the risk of validator disengagement present major challenges. Unless Ethereum can innovate and regain user interest, its underperformance relative to Bitcoin may continue,” the report said.
Ethereum’s struggles in 2024 are evident in its market performance: while Bitcoin surged 120% last year, Ethereum only gained 48%. This 70% underperformance against Bitcoin has raised questions about Ethereum’s value proposition and the effectiveness of its ongoing upgrades.
Ethereum Staking issues and usage stagnation
According to 10X, one of Ethereum’s main selling points, staking, has also faced criticism. With 28% of all ETH staked, many argue that Ethereum has become a passive income vehicle rather than a blockchain actively used for DeFi and other activities. Stake returns, currently around 3%, have become less attractive compared to traditional financial interest rates (TradFi).
The Ethereum network has also struggled to return to peak activity levels. Weekly transactions, which peaked at 11 million in May 2021, have plateaued around 9 million. Likewise, weekly active addresses remained in a range between 300,000 and 400,000.
“Ethereum’s stagnation stands in stark contrast to the growth of alternative blockchains. The chain’s decline in user activity and failure to catalyze innovations points to a deeper systemic problem,” 10X Research added.
Other pressing concerns include the trend among validators. The month-on-month growth rate of active validators has turned negative, raising concerns that some may leave the network. If this trend accelerates, it could lead to additional downward pressure on ETH prices.
Adding to the uncertainty is Ethereum’s realized price – the average price at which the entire supply of ETH was last moved on-chain – currently at $2,093. This price is lower than the average staked ETH deposit price of $2,383, suggesting that validators could incur losses if prices continue to fall.
Despite the challenges, December’s flows underscore Ethereum’s enduring appeal among institutional investors. As the ETH ETF market matures, Ethereum could benefit from wider adoption and improved liquidity.
Data from BeInCrypto shows that ETH is down 0.37% since Wednesday’s session opened. At the time of writing, the price of Ethereum was $3,333.
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