ETH breaks through 4600 USD, hitting a nearly three-year high, driven by institutional interest and policy expectations.

Ethereum price breaks through $4600, hitting a nearly three-year high.

Ethereum (ETH) has performed strongly recently, with an increase of over 5% on August 12, breaking the $4600 mark and reaching its highest price since December 2021. This significant rise is driven by multiple factors.

First, companies' interest in cryptocurrencies is growing rapidly. A large tech company has revealed plans to raise up to $20 billion to increase its holdings of Ethereum. The company currently holds approximately $5 billion worth of ETH, making it one of the known largest corporate holders of the second largest cryptocurrency. This reflects a broader trend of companies integrating digital assets into their financial strategies, which is accelerating as institutional channels into the crypto market continue to expand.

Secondly, the U.S. spot ETF market continues to heat up. On August 11, the net capital inflow of the Ethereum spot ETF listed in the U.S. hit a daily record high of $1 billion since its launch this year. It is worth noting that this is the second time since August that its net inflow has exceeded that of the Bitcoin spot ETF.

In addition, the market's expectations for the Federal Reserve to cut interest rates at the September policy meeting have heated up. The latest U.S. Consumer Price Index (CPI) data shows that although the annual inflation rate is above the central bank's 2% target, it is generally in line with expectations. This has prompted market participants to increase bets that the Federal Reserve will implement its first interest rate cut since 2020, which could ease the overall lending environment in the financial markets.

In the past month, Ethereum has shown strong performance compared to Bitcoin, with the ETH/BTC ratio rising nearly 50% to over 0.37. Although it is still 15% lower than a year ago, Ethereum's market share in the cryptocurrency market has been steadily increasing recently. This trend is closely related to the network's dominant position in asset tokenization, decentralized finance (DeFi), and blockchain settlement systems that mimic traditional market infrastructure. A recent series of software upgrades aimed at improving scalability and reducing transaction costs has provided strong support for these applications.

The changes in the regulatory environment have also shaped the current market landscape to some extent. In the United States, the passage of relevant legislation has provided clearer guidance for certain digital asset activities, which is seen as one of the factors for institutional re-engagement in the market.

It is worth mentioning that, in addition to the aforementioned large tech companies, other digital asset management institutions have also increased their ETH holdings, further boosting market demand. The combination of corporate accumulation, strong inflows into ETFs, and expectations of potential monetary policy easing has collectively driven Ethereum to reach its highest price in nearly five years.

Despite the high volatility that often accompanies significant price increases in history, the current market environment reflects a confluence of multiple positive factors, with funds continuing to concentrate on buying this asset in recent weeks. Analysts believe this may signal the beginning of a new bull market cycle in the cryptocurrency market, but investors still need to be vigilant about potential risks and maintain a cautious attitude.