Investors Buy the Dip as Ethereum ETF Sees $120M Net Inflows This Week

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The cryptocurrency market ended a turbulent week on a calmer note, with investors stepping in to buy the dip despite sharp price swings that tested both institutional newcomers and seasoned traders. While volatility is nothing new to crypto veterans, the recent market movements have highlighted growing resilience and strategic positioning—especially around exchange-traded funds (ETFs) tied to major digital assets.

This week, spot Ethereum ETFs recorded approximately **$120 million in net inflows**, according to data from multiple crypto analytics platforms. The majority of buying activity occurred on Monday and Tuesday, coinciding with Ethereum’s 42% pullback from its March peak above $4,000. As fear gripped markets, savvy investors viewed the drop not as a warning sign—but as a rare opportunity.

👉 Discover how market dips are creating strategic entry points for smart investors.

Ethereum ETF Gains Momentum Amid Market Volatility

Launched less than three weeks ago, spot Ethereum ETFs are still in their early adoption phase. Compared to the well-established spot Bitcoin ETFs—now managing a combined $54.3 billion in assets—Ethereum’s ETFs hold $7.25 billion in assets under management (AUM). While the gap remains significant, the recent inflow signals increasing institutional interest.

The timing of this surge is critical. Ethereum’s price dropped below $2,400 earlier in the week, sparking widespread liquidations and panic among leveraged traders. Over **$100 million in Bitcoin short positions were liquidated** within 24 hours—a classic sign of a market bottom forming. As prices rebounded, Ethereum climbed back above $2,700 by Friday, while Bitcoin briefly touched $63,000.

Despite these gains, both assets remain down over the past seven days. Ethereum is enduring its worst weekly performance in nearly two years, reflecting heightened sensitivity to macroeconomic shifts and regulatory uncertainty.

Bitcoin ETF Demand Rebounds Midweek

Although net flows for spot Bitcoin ETFs were negative early in the week, demand picked up sharply midweek. On Wednesday and Thursday alone, over $245 million flowed into Bitcoin ETFs, driven largely by institutional rebalancing and strategic allocations.

A key catalyst was Morgan Stanley’s decision to authorize its 15,000 financial advisors to recommend spot Bitcoin ETFs from BlackRock and Fidelity to clients with over $1.5 million in net worth. This marks a pivotal moment: Morgan Stanley is the first major Wall Street wealth manager to proactively endorse crypto ETFs rather than wait for client inquiries.

This move underscores a broader shift in financial services. Morgan Stanley already holds around **$270 million in spot Bitcoin ETFs**, as disclosed in its May 13F filing. With $1.5 trillion in assets under management, even a small allocation percentage could translate into billions flowing into digital assets over time.

👉 See how institutional adoption is reshaping the future of crypto investing.

Market Correlation with U.S. Equities Increases

This week also highlighted a growing correlation between cryptocurrency markets and traditional equities. For much of the period, crypto prices moved in tandem with the S&P 500—particularly after Thursday’s weaker-than-expected jobless claims data eased recession fears.

The S&P 500 posted its best single-day gain in nearly two years, fueling risk-on sentiment across asset classes. Crypto markets responded swiftly, with total market capitalization rebounding from lows to surpass $2.1 trillion.

However, crypto-linked stocks continue to struggle. Coinbase (COIN), MicroStrategy (MSTR), and Riot Platforms (RIOT) all posted their third consecutive weekly decline, suggesting investor caution despite positive momentum in underlying digital assets.

Regulatory Clarity Begins to Emerge

One of the most encouraging developments came from the legal front. In a recent ruling involving Ripple Labs, U.S. District Judge Analisa Torres ordered Ripple to pay a **$125 million civil penalty**—a fraction of the $2 billion sought by the Securities and Exchange Commission (SEC).

This outcome signals a potential shift in regulatory interpretation. By treating certain crypto transactions as non-securities under specific conditions, the court decision may pave the way for clearer guidelines and reduced enforcement overreach.

Such rulings could boost investor confidence in spot Ethereum and other token-based ETFs, especially as the SEC continues to evaluate broader market implications.

FAQ: Understanding This Week’s Crypto Moves

Q: Why are investors buying Ethereum despite its recent price drop?
A: Many view the 42% correction from its March high as an attractive entry point. With growing institutional adoption and ETF inflows, long-term fundamentals remain strong despite short-term volatility.

Q: How do spot Ethereum ETFs differ from Bitcoin ETFs?
A: While both track their respective asset prices, Ethereum ETFs are newer and have lower AUM. However, they offer exposure to smart contract functionality and decentralized applications—features not available in Bitcoin-focused funds.

Q: What triggered the rebound in crypto prices midweek?
A: A combination of dip-buying, Morgan Stanley’s endorsement of Bitcoin ETFs, and improved macroeconomic data—including lower jobless claims—helped restore market confidence.

Q: Are more institutions expected to follow Morgan Stanley’s lead?
A: Yes. As regulatory clarity improves and performance data accumulates, more wealth managers are likely to integrate crypto ETFs into client portfolios—especially for high-net-worth individuals.

Q: Could Ethereum’s recent underperformance affect future ETF inflows?
A: Short-term price movements may cause hesitation, but structural trends like staking yields, network upgrades, and developer activity support long-term demand for Ethereum-based products.

Q: Is the SEC becoming more lenient toward crypto?
A: Not necessarily lenient—but recent court rulings suggest that enforcement actions may face stronger judicial scrutiny, leading to more balanced outcomes.

👉 Stay ahead of regulatory shifts and market trends shaping crypto’s next chapter.

Core Keywords

As the dust settles from another volatile week, one trend is clear: institutional participation is accelerating. Whether through strategic ETF investments or landmark legal rulings, the foundation for mainstream crypto integration is being laid—one billion-dollar inflow at a time.