Ethereum-linked stocks beat ETFs as crypto ETF inflows slow

Ethereum-linked equities outperformed exchange-traded funds (ETFs) this week as a 5.5% surge in ETH prices reignited interest in yield-generating corporate holdings. The move comes amid signs that crypto ETF inflows are decelerating, even as broader market sentiment turns bullish.

Companies with significant Ethereum treasuries, such as Coinbase (COIN) and MicroStrategy (MSTR), posted stronger price gains than ETH-based ETFs, which hold the asset passively. The divergence has caught the attention of market analysts, who point to the yield advantage of staking-enabled corporate strategies as a decisive factor.

“Stocks of companies that actively stake ETH or build Ethereum infrastructure are offering a double play—capital gains plus yield,” — Alex Thorn, Head of Firmwide Research, Galaxy Digital, in a market briefing.

By contrast, Ethereum ETFs that do not participate in staking rewards saw slower crypto ETF inflows despite the asset’s rally.

Investor shift toward yield-focused corporate treasuries

The current market behavior reflects a broader re-evaluation among institutional investors about where to deploy capital. While ETFs offer regulatory simplicity and liquidity, they lack the compounding benefits of staking rewards, which corporate treasuries can leverage to enhance returns.

“Crypto ETF inflows are facing natural competition from corporate treasuries that can monetize ETH holdings in ways passive funds cannot,” — David Duong, Head of Institutional Research, Coinbase.

In practical terms, this means that a company holding ETH can both benefit from price appreciation and generate yield through staking, whereas ETF investors only gain from market price changes.

The data supports this shift: ETH-focused equities rose between 8% and 12% this week, compared to gains of just 4% to 6% for most Ethereum ETFs. This widening performance gap is prompting portfolio managers to reassess their exposure strategies.

Regulatory and structural considerations for ETFs

The lag in crypto ETF inflows is not solely due to yield limitations. Regulatory barriers remain a key factor. U.S.-listed Ethereum ETFs are structured to avoid staking due to Securities and Exchange Commission (SEC) restrictions, which prevents them from accessing the additional yield stream available to private companies.

This structural limitation makes ETFs less competitive in a market environment where staking yields can reach 4%–5% annually. Institutional adoption of ETH treasuries, while riskier in terms of corporate governance and liquidity, is increasingly viewed as a viable alternative.

Still, ETF providers argue that their products offer unmatched transparency and investor protection.

“ETFs remain the most accessible route for regulated exposure to Ethereum, particularly for pension funds and compliance-bound investors,” — Sarah Brennan, Senior Analyst, VanEck.

Outlook: Will ETF inflows rebound?

The trajectory of crypto ETF inflows in the coming quarters will depend on both market performance and regulatory developments. If U.S. regulators permit staking within ETFs, the competitive landscape could shift quickly. Until then, equities tied to ETH staking are likely to maintain their performance edge.

Market strategists caution that the current outperformance of ETH-linked stocks may not be permanent. If ETH prices correct sharply, companies with leveraged exposure could see steeper declines than passive funds. This risk factor could draw some capital back toward ETFs if volatility returns.

For now, the ETH rally has highlighted a significant trend: investors are increasingly prioritizing active yield generation over purely passive exposure. Whether this becomes a permanent feature of the market will depend on how crypto ETF inflows respond to evolving yield opportunities and regulatory frameworks.⁶