Layer-2s: The New Institutional Playground After Ethereum ETFs
Ethereum’s spot (CRYPTO: ETH) ETFs, which began trading July 23, 2024, have drawn significant institutional capital and opened a new avenue of regulated exposure to ETH. By Q3 2025, combined inflows to Ethereum investment products ran into the billions, and investors now face a choice: passive price exposure via ETFs, or active participation in the high-throughput Layer-2 networks that run most on-chain activity today.
Ethereum ETFs Bring Legitimacy and Momentum
Much like Bitcoin’s (CRYPTO: BTC) ETF launch earlier this year, the products attracted significant inflows and signalled a shift towards institutional acceptance. However, Ethereum is not just a store of value; it’s a programmable network with an entire ecosystem of decentralised applications.
The distinction means that the effects of the ETF extend far beyond price. Institutional confidence in Ethereum as an asset may naturally spill over into confidence in its infrastructures especially the L2 networks that make the blockchain cheaper and faster to use.
According to CoinShares, Ethereum investment products recorded $646 million in inflows, accounting for nearly 20% of total digital asset investments that week. This sustained trend throughout Q3 underscores institutional confidence in Ethereum following its ETF approval. But while ETF exposure gives investors price exposure, the real yield and innovation are happening across Arbitrum (CRYPTO: ARB), Optimism (CRYPTO:
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