The long-awaited Ethereum exchange-traded funds (ETFs) began trading today, attracting a staggering $4.7 billion in inflows on their debut. The milestone event propelled Ethereum (ETH) to a new 2024 high, surpassing $4,500 as institutional and retail investors rushed to gain exposure to the second-largest cryptocurrency.

Historic Launch: Ethereum ETFs See Massive Demand

The approval and launch of spot Ethereum ETFs mark a pivotal moment for the crypto industry, following the success of Bitcoin ETFs earlier this year. Major financial institutions, including BlackRock, Fidelity, and Grayscale, rolled out their ETH-based funds, with trading volumes exceeding expectations.

Analysts had projected first-day inflows between $1B and $3B, but the actual figure of $4.7B underscores strong institutional interest. "This is a watershed moment for Ethereum," said Michael Sonnenshein, CEO of Grayscale. "The ETF structure provides a regulated, accessible way for traditional investors to participate in ETH’s growth."

ETH Price Rally: Breaking $4,500 Amid ETF Frenzy

Ethereum’s price surged nearly 12% in the 24 hours following the ETF launch, climbing from $4,100 to a peak of $4,520 before settling around $4,480. The rally extended ETH’s monthly gains to over 30%, outperforming Bitcoin (BTC), which saw a more modest 5% increase in the same period.

Key factors driving ETH’s upward momentum:

• ETF-driven liquidity: Institutional buying pressure from ETF issuers.

• Staking yield appeal: Ethereum’s proof-of-stake mechanism offers additional yield potential.

• DeFi & NFT resurgence: Increased activity in decentralized finance and non-fungible tokens.

Market Reactions & Expert Insights

• Bitcoin ETFs: While BTC ETFs still dominate with over $50B in assets, Ethereum’s rapid adoption suggests diversification into altcoins is accelerating.

• Traditional Finance: Major banks and hedge funds are reportedly increasing ETH allocations.

• Altcoins: Layer-2 tokens (e.g., Arbitrum, Optimism) and DeFi coins (e.g., UNI, AAVE) also saw double-digit gains.

James Seyffart, Bloomberg ETF analyst, noted, "Ethereum ETFs are off to a blazing start. If inflows sustain, ETH could challenge Bitcoin’s dominance in the ETF space by year-end."

What’s Next for Ethereum?

With the ETF catalyst now in play, analysts are revising ETH price targets:

• Short-term (1-3 months): $5,000 if ETF inflows remain strong.

• Long-term (2025): $8,000-$10,000, assuming institutional adoption grows.

Potential risks include regulatory scrutiny and macroeconomic factors, but for now, Ethereum’s outlook appears bullish.