Ether (ETH) has faced underperformance relative to bitcoin (BTC) so far this year, but new trends in exchange-traded fund (ETF) inflows suggest this could be about to change, according to Bernstein’s latest research report.

The broker highlighted that Blackrock’s spot ether ETF saw $250 million in inflows on Friday, significantly outpacing the $137 million recorded for its spot bitcoin ETF. This shift in inflows is expected to create favorable supply-demand dynamics for ETH, signaling that the cryptocurrency could begin to outperform its larger counterpart, bitcoin.

Another key factor potentially boosting ether is the growing appeal of staking yields. Bernstein noted that while early ether ETF applications didn’t include staking yields due to regulatory restrictions, the changing regulatory environment, particularly under a potentially more crypto-friendly SEC, could pave the way for yield approval. As Ethereum blockchain activity picks up, staking yields are expected to increase, possibly reaching 4-5%.

The Ethereum network continues to be the dominant platform for tokenization and stablecoins, driving increased on-chain activity. Since Ethereum’s shift to a proof-of-stake consensus mechanism, the total ether supply has remained stable at around 120 million tokens.

Ethereum staking currently offers a yield of approximately 3% from transaction fees, which has led to 28% of the ether supply being locked in staking contracts. Additionally, 10% of the supply is tied up in deposit and lending contracts. Notably, nearly 60% of ether hasn’t changed hands in the last year, indicating a strong, committed investor base. This resilience supports the positive supply-demand dynamics, reinforcing the bullish outlook for ether.