Ethereum Enters a New Chapter of Capital: Institutional Reserve Boom Drives Price Rebound

Recently, the price of Ethereum has continued to rise, and market confidence has clearly rebounded. This wave of rebound is largely attributed to the active influx of institutional capital. As more institutional participants accelerate their entry, Ethereum may face significant changes in the capital landscape.

Market Performance After the Launch of Spot ETF

The launch of the Ethereum spot ETF was once seen as an important milestone connecting traditional finance, and the market generally expected it to provide a significant boost to Ethereum. However, after the ETF's launch in July 2024, the market reacted tepidly, with ETH prices performing weakly and the ETH/BTC exchange rate continuing to decline, impacting investor confidence. At the same time, some selling actions by the Ethereum Foundation sparked controversy; although they may have been driven by operational needs, market sentiment is sensitive, leading to an increase in bearish voices.

Data shows that since the launch of the ETF, the cumulative net inflow of funds has been approximately 5.76 billion USD, accounting for 3.87% of the total market capitalization of Ethereum. In the past 13 months, there have only been three months with net outflows, totaling 930 million USD, indicating a stable absorption of funds overall.

However, the steady inflow of ETF funds has failed to effectively support the price of ETH. From the launch of the ETF to the announcement of the first ETH reserve company establishing strategic reserves, the maximum increase in ETH price was only 16.55%, while the maximum decrease reached as high as 63.34%. In contrast, after the launch of the Bitcoin spot ETF, the price of BTC surged by 153.3%, showing a stronger market performance.

Market Trend Shift

In the past two months, the market trend has begun to reverse. After a deep adjustment, ETH has shown a technical rebound. The Ethereum Foundation has initiated internal governance reforms, and listed companies are incorporating ETH into their balance sheets, injecting new driving force into ETH.

Since several companies announced their allocation of Ether, the price of Ether has risen by 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 formation of a new narrative around strategic reserve assets.

Market bullish sentiment is strong, with multiple well-known investors publicly expressing optimism about the long-term value of Ethereum. At the same time, institutions are accelerating their entry, with Ethereum spot ETFs recording over $1 billion in net inflows for the past two months.

Institutional Holdings Scale Expands

As traditional financial giants enter the spot ETF arena and listed companies initiate a wave of Bitcoin reserves, the narrative and pricing power of Bitcoin have shifted from the crypto-native community to Wall Street capital. This trend appears to be repeating itself with Ethereum.

Data shows that there are 54 entities holding more than 100 ETH, collectively holding over 1.6 million ETH, worth more than $5.07 billion, which is equivalent to 35% of the total size of the ETH ETF. In the past two months, several publicly traded companies have announced plans to include ETH in their balance sheets.

From the perspective of the institutional composition entering Ethereum, it can be mainly divided into two camps. One camp is the native forces of the early Ethereum ecosystem banding together for self-rescue, while the other camp consists of Wall Street institutions replicating the Bitcoin reserve logic.

If these institutions continue to expand their positions, the pricing power, discourse power, and even governance power of Ethereum may face a reshuffle. However, most public companies holding ETH are currently under financial pressure, aiming to hedge against inflation or seek short-term gains, and have not yet shown a willingness to be deeply tied to the ecological construction of Ethereum.

Unlike the surge in Bitcoin reserves, Ethereum has yet to see a representative figure that possesses both faith attributes and traditional capital influence, which to some extent limits Ethereum's dissemination in mainstream capital markets.

The Ethereum official has an open attitude towards institutional布局. Founder Vitalik Buterin stated that institutions choose Ethereum because of its stability, security, uptime, and clear technical roadmap. At the same time, Vitalik also emphasized the importance of dual governance mechanisms and decentralization.

Overall, with Ethereum igniting a reserve craze, market attention and liquidity have significantly increased. However, if the price rise lacks support from actual activity in the ecosystem, it will be difficult to sustain. The true core driving the stable growth of ETH's value remains the continuous innovation and enhancement of activity within the Ethereum ecosystem. Currently, the Ethereum Foundation is undertaking deep reforms from multiple dimensions, striving to reshape the dominance of the ecosystem, strengthen governance effectiveness, and reverse the negative perceptions of Ethereum from the outside.