What Happened?
Driven by multiple positive factors, the price of Ethereum surged strongly, once breaking through the $4,500 mark. With an increase of about 40% since the beginning of the year, Ethereum’s price performance has outpaced that of market leader Bitcoin, demonstrating extremely strong market momentum and investor confidence.
This round of price increase did not come from nowhere, but was driven by two major engines. Firstly, the “Ethereum Corporate Treasury” is buying and hoarding large amounts of Ethereum as corporate reserve assets; secondly, spot Ethereum ETFs are experiencing record fund inflows, both of which have jointly driven up demand and prices.
This wave of enthusiasm reflects that cryptocurrencies are accelerating their integration into mainstream finance. Since the beginning of 2024, half of the top 20 products by fund inflow among newly launched ETFs in the U.S. are related to cryptocurrencies. This proves that there is a strong demand from investors to invest in digital assets through compliant and regulated channels, indicating a significant increase in market acceptance.
Ethereum Hits Annual High
The price of Ethereum (ETH) has been rising continuously in recent days, even breaking through the $4,500 mark this week, once again drawing significant market attention. The robust upward trend is primarily driven by two forces: the rise and continuous accumulation by the “Ethereum Corporate Treasury,” and the record fund inflows into Ethereum spot ETFs, which have brought a massive “demand shock” to the market.
According to price data from The Block, as the second-largest cryptocurrency, Ethereum saw a daily increase of approximately 4.85%, rising about 40% since the beginning of the year. Looking at the time frame from the beginning of this year (January 1, 2025) to now, Ethereum’s price performance has even surpassed that of Bitcoin (BTC).
However, when looking back over the past full 12 months, Bitcoin’s overall price performance is still stronger than that of Ethereum. Historically, Ethereum reached an all-time high of $4,878.26 during the bull market in November 2021, and before this recent breakthrough, the last trading price above $4,000 was on December 16, 2024.
Why is Ethereum Rising?
Reason One: Corporate Buying Frenzy
One of the core factors driving this round of increase is the rise of the “Ethereum Corporate Treasury.” These companies have accumulated Ethereum worth over $9 billion in recent months. Among them, the largest holder, BitMine, owns 1.15 million ETH (currently valued at about $5 billion) and applied yesterday (12) to expand its market equity plan to $24.5 billion to purchase more Ethereum. Standard Chartered analyst Geoffrey Kendrick pointed out in a report that the layout of these corporate treasuries “has just begun,” and their holdings could grow tenfold in the future, reaching 10% of Ethereum’s total supply.
Reason Two: Growth of Ethereum Spot ETFs
Another strong driving force comes from the explosive growth of Ethereum spot ETFs. Since their launch in July 2024, these ETF products have seen cumulative net inflows of $9.4 billion, with about $5 billion in market value added just last month. Ethereum spot ETFs also set a record this week with over $1 billion in single-day net inflows, showing extremely strong market demand. Bitwise investment chief Matt Hougan pointed out that the dual purchasing pressure from corporate treasuries and ETFs has created a “demand shock” for Ethereum. It is estimated that since May of this year, the amount of Ethereum purchased by these funds and corporate treasuries has been 32 times the new output of the Ethereum network during the same period.
Cryptocurrency ETFs Dominate the Market, Becoming a New Investment Darling
From a broader perspective, cryptocurrency-related ETFs have become a dominant force in the U.S. investment market. The total net inflow of Ethereum spot ETFs reached $5.4 billion in July, setting a historical high for monthly inflows of all Ethereum-related investment products. ETF analyst Nate Geraci pointed out that since the beginning of 2024, over 1,300 ETFs have been launched in the market, and among the top 20 products by fund inflow, half are related to digital assets. Data shows that the top four ETFs with the highest fund inflows are all cryptocurrency-related products:
- BlackRock iShares Bitcoin Trust (IBIT): Leading with an inflow of $57.4 billion.
- Fidelity Wise Origin Bitcoin Fund (FBTC): Inflow of $12.1 billion.
- iShares Ethereum Trust (ETHA): Inflow of $9.6 billion.
- YieldMax MSTR Option Income Strategy ETF (MSTY): Inflow of $7.2 billion. Although this product does not directly invest in cryptocurrencies, its options strategy is linked to the stock of MicroStrategy, which holds a large amount of Bitcoin.
Additionally, the list also includes Ark 21Shares Bitcoin ETF (ARKB), Bitwise Bitcoin ETF Trust (BITB), Fidelity Ethereum Fund ETF (FETH), and leveraged Ethereum ETFs, reflecting investors’ strong interest in accessing digital assets through regulated exchange products. It is evident that Ethereum’s price surge is closely tied to the success of cryptocurrency ETFs. Institutional and retail investors are entering the market on an unprecedented scale through these regulated financial instruments, not only driving up asset prices but also symbolizing that digital assets are accelerating their integration into the mainstream financial system.
Reference: Cointelegraph, The Block