ETF capital flows may indicate the future market scenario. Is ETH finally ready to take over BTC?

Author: Azuma, Odaily Planet Daily

On December 29, influential cryptocurrency trader Eugene Ng Ah Sio posted on X his outlook and expectations for the first quarter of 2025, predicting that ETH will be the best-performing mainstream token in the next quarter.

Eugene first mentioned three reasons for his bullish outlook on ETH: technical trends; Trump's favor (especially WLF's significant purchases in the Ethereum ecosystem); and the development status of the Base ecosystem. He then reiterated that since Trump's election, the inflow of funds into Ethereum spot ETFs has undergone a 180-degree turnaround.

ETF Fund Trends: Is Ethereum More Favorable?

Eugene did not exaggerate; SoSoValue data shows that since Trump's victory on November 6, the inflow of funds into spot Ethereum ETFs has significantly increased, with the growth trend even surpassing that of Bitcoin spot ETFs during the same period.

Entering late December, this trend has become even more apparent.

SoSoValue data shows that during the last trading week (Eastern Time December 23 to December 27), Ethereum spot ETFs had a net inflow of $349 million, while Bitcoin spot ETFs saw a net outflow of $388 million—this significant difference in fund movement may indicate a better outlook for ETH in the future.

As of the time of writing, the official ETF inflow/outflow data for this Monday has not been fully released, but according to on-chain monitoring by Lookonchain, yesterday, ten U.S. Bitcoin ETFs had a net outflow of 3,000 BTC ($275.59 million); nine Ethereum ETFs had a net inflow of 16,359 ETH ($54.33 million), and the trend seems to remain unchanged.

Trump Concept Family Package

In addition to the ETF liquidity data, another reason supporting the bullish outlook for ETH is the continuous accumulation by the Trump family project WLFI.

Recently, WLFI has successively purchased several Ethereum ecosystem tokens such as AAVE, LINK, ENA, and ONDO, but the largest holding of the project remains ETH.

Although this is somewhat related to the fact that WIFI itself is deployed in the Ethereum ecosystem, the phrase "The president is on board, what are you still hesitating for?" still has a strong FOMO effect.

Reviewing Historical Data, Will History Repeat Itself?

Coinglass data shows that in the first quarter of the new year following historical U.S. elections and Bitcoin halving cycles, ETH has performed the best, especially in the first quarters of 2017 and 2021, where ETH rose by 518% and 161%, respectively, even surpassing BTC's returns in those two quarters (11.9%, 103.2%).

If history repeats itself, ETH may see significant gains in Q1 of next year.

Potential Beta Choices

If ETH does rise as expected, some Ethereum ecosystem tokens may become higher-risk/higher-reward Beta choices, such as:

• Trump concept token combination: AAVE, LINK, ENA, ONDO;
• Grayscale Top 20 choices: LINK, UNI, AAVE, ENA, OP, LDO;
• Potential benefits from ETF staking expectations: LDO, EIGEN, RPL, SSV;
• Leading AI concepts in the Ethereum ecosystem: VIRTUAL, GAME, AIXBT;

Note: The above tokens are merely examples from specific sectors and concepts and do not constitute investment advice.

Opposing Views

Although several well-known investors/traders, including Eugene, have clearly expressed a bullish outlook on ETH, there are also voices holding a pessimistic view on ETH's future performance.

Markus Thielen, founder of 10x Research, painted a more pessimistic scenario, predicting that ETH will continue to perform poorly and will not reach new historical highs in a "hawkish" macro environment in 2025: "We expect a more conservative outlook for ETH in 2025. Unlike previous years, the initial hawkish policies may be tested by weakening liquidity tailwinds."

During this period of significant market volatility, the predictions provided by various parties are merely "one-sided conclusions" based on their respective conditions and indicators; no one can predict the future, so remember to DYOR before making any moves.