Ethereum reserve wave rises, institutional funds influx drives price rebound

Recently, the price of Ethereum ( ETH ) has continued to rise, and market confidence has noticeably improved. This rebound is largely attributed to the active entry of institutional funds. As more institutional participants accelerate their layout, Ethereum may face significant changes in the capital landscape.

Market Performance After the Launch of Spot ETF

In July 2024, the Ethereum spot ETF was officially launched, which is seen as an important milestone connecting traditional finance. However, after the ETF went live, the market reaction was tepid, with ETH prices performing weakly and the ETH/BTC exchange rate continuing to decline, affecting investor confidence.

Data shows that since the launch of the ETF, the cumulative net inflow of funds is approximately $5.76 billion, accounting for 3.87% of Ethereum's total market cap. In the past 13 months, there were net outflows in only 3 months, totaling $930 million, and the overall trend indicates a robust capital absorption.

However, the steady inflow of ETF funds has not effectively supported the price of ETH. From the launch of the ETF to the announcement of the first ETH reserve company's establishment of strategic reserves, the maximum increase in ETH was only 16.55%, while the maximum decrease reached 63.34%. In contrast, after the launch of the Bitcoin spot ETF, the price of BTC surged by 153.3%, showing a stronger performance.

Market Trend Shift

In the past two months, the market sentiment has gradually improved. After a deep adjustment, ETH has experienced a technical rebound, coupled with the Ethereum Foundation initiating internal governance reforms, and public companies beginning to include ETH on their balance sheets, injecting new narrative momentum into ETH.

Since several listed companies announced their allocation of ETH, the price of ETH has recorded a cumulative increase of 22.29%, significantly outperforming Bitcoin's 7.9% during the same period. This round of Rebound is not only based on asset revaluation but also benefits from the gradual formation of a new narrative around strategic reserve assets.

The current market is experiencing strong bullish sentiment, with investment institutions publicly stating that the long-term value of Ethereum is severely underestimated. Meanwhile, institutions are accelerating their entry, with Ethereum spot ETFs recording over $1 billion in net inflows for nearly two consecutive months.

Institutional Holdings Situation and Impact

Data shows that there are 54 entities holding more than 100 ETH, collectively holding over 1.6 million ETH, worth over $5.07 billion, which accounts for 35% of the total size of the ETH ETF. In the past two months, multiple listed companies have announced that they will include ETH in their balance sheets.

From the current stage of institutions entering Ethereum, they can be mainly divided into two camps: one camp is the early native forces of the Ethereum ecosystem banding together for self-rescue; the other camp replicates the Bitcoin reserve logic in a Wall Street style.

If the positions of these institutions continue to expand, the pricing power, discourse power, and even governance power of the Ethereum ecosystem may be reshuffled. However, at present, listed companies holding ETH are mostly facing financial pressure, primarily aiming to hedge against inflation, boost stock prices, or seek short-term gains, and have not yet shown a willingness to be deeply tied to the construction of the Ethereum ecosystem.

Ethereum's Official Stance and Future Outlook

Ethereum's official stance is open towards institutional arrangements. The founder stated that institutions choose Ethereum because it is stable, secure, does not go down, and has a clear technical roadmap. At the same time, he also emphasized the importance of dual governance mechanisms and decentralization.

With the wave of reserves initiated by Ethereum, market attention and liquidity have significantly increased. However, if the price rise lacks support from actual ecological activity, it will be difficult to sustain. The core that truly drives the steady growth of ETH value is still the continuous innovation and increased activity within the Ethereum ecosystem. Currently, the Ethereum Foundation is carrying out deep reforms from multiple dimensions, aiming to reshape the ecological dominance and strengthen governance effectiveness, thereby reversing the negative perception of Ethereum in the outside world.