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Spot Ethereum ETFs, including the iShares Ethereum Trust (ETHA), soared for a second day after upgrades at the second-largest cryptocurrency boosted optimism that it will compete better against other digital tokens, such as Solana, that are competing for market share.
The $2.3 billion ETHA, the largest spot Ethereum ETF, jumped 8.4% as of midday Friday. That follows yesterday’s 18.2% gain. Still, even with today’s gain, the fund has dropped 43% since closing at $30.69, its highest price since spot Ethereum ETFs began trading in June.
Ether, the token that trades on the Ethereum network, has gained 25% over the past 48 hours, according to CoinMarketCap, since implementation of the so-called Pectra upgrade. Among a host of improvements, the changes are intended to boost capacity, reduce stress and otherwise improve the system as other digital currencies gain in price.
“Ethereum is now focused on increasing transaction capacity and speed, which is likely to help it play ‘catch up’ to alternatives like Solana,” Luke Nolan, senior Ethereum research associate at London-based Coinshares, said in an email. “This is a stark change from the ‘slower’ and more academic approach that Ethereum developers were taking previously.”
ETHE, ETH & ETHW in Focus
While Ethereum ETF prices have jumped in the past few days, investors are largely staying on the sidelines and not putting new money into the largest funds trading the spot token. Since Friday, May 2, investors have pulled a net $1.7 million from ETHA and $12 million from the second-largest, the $2 billion Grayscale Ethereum Trust ETF (ETHE).
The next-largest, the $867 million Grayscale Ethereum Mini Trust (ETH), had $12 million in inflows on May 2, while the $167.4 million Bitwise Ethereum ETF (ETHW) has had neither inflows or outflows over the period.
Ethereum funds jumped in late April and pulled in a quarter of a billion dollars in new money on bets that the Securities and Exchange Commission will permit so-called staking—the cryptocurrency’s validation mechanism that acts as a sort of yield device—in the ETFs.
The token has still dropped 25% over the past year, lagging the 65% gain in Bitcoin.
The name “Pectra” is a combination of Prague, the location of the Devcon IV development conference, and Electra, a blue-white giant star in the constellation of Taurus, according to ethereum.org.