Ethereum welcomes a capital shift!
In recent days, as the price of ETH continues to rise, the race for Ethereum reserves has become increasingly intense, and market confidence has significantly rebounded. This wave of rebound is largely due to the active influx of institutional capital. However, with the accelerated entry of more institutional participants, Ethereum may face a capital shift.
Wall Street enters through ETFs, and the narrative of listed companies' reserves brings a new turning point.
The launch of the Ethereum spot ETF was once viewed as a key step towards Wall Street and traditional finance, with the market widely expecting it to bring significant boosts to Ethereum's price and ecosystem.
However, since the launch of the Ethereum spot ETF in July 2024, the market has not seen the expected spark; the price of ETH has been weak, and the ETH/BTC exchange rate continues to decline, significantly impacting investor confidence. At the same time, some selling actions by the Ethereum Foundation have also sparked market controversy. Although these sales may be due to operational needs, the sensitivity of market sentiment has led to exaggerated interpretations of these selling actions, with voices doubting Ethereum becoming increasingly strong.
According to SoSoValue data, since the launch of the Ethereum spot ETF (July 23, 2024), the cumulative net inflow of funds has been approximately $5.76 billion, accounting for 3.87% of Ethereum's total market capitalization. In terms of fund flow rhythm, during the past 13 months, only three months experienced net outflows, with an accumulated outflow amount of $930 million, showing a generally robust trend of capital absorption.
However, the steady inflow of ETF funds has not formed effective support at the ETH price level. CoinGecko data shows that since the launch of the ETF until the first ETH reserve company SharpLink Gaming announced the establishment of a strategic Ethereum reserve (May 27, 2025), the maximum price increase of ETH was only 16.55%, while the maximum decline reached 63.34%. In contrast, since the launch of the Bitcoin spot ETF on January 11, 2024, the price of BTC has surged by 153.3%, with a much stronger market performance. The market performance of Ethereum and Bitcoin under the ETF support forms a stark contrast.
It was only in the last two months that the market sentiment began to gradually shift. On one hand, ETH has shown a technical rebound after a deep adjustment; on the other hand, the Ethereum Foundation has initiated internal governance mechanism reforms, coupled with listed companies beginning to incorporate ETH into their balance sheets, injecting new narrative momentum into ETH.
Since companies like SharpLink Gaming, Siebert Financial, and Bit Digital announced their allocation of ETH, the price of ETH has recorded a cumulative increase of 22.29% (data as of July 16), significantly outperforming Bitcoin's 7.9% during the same period. This rebound is not only based on asset revaluation but also benefits from the gradual formation of a new narrative around strategic reserve assets.
Currently, the market sentiment is overwhelmingly bullish; for example, ARK Invest founder Cathie Wood has recently publicly stated that the long-term value of Ethereum is severely underestimated; Varys venture capital director and Multicoin co-founder are betting on whether ETH can reach $10,000 by the end of 2026. At the same time, institutions are accelerating their entry, with Ethereum spot ETFs recording over $1 billion in net inflows for two consecutive months. Bitwise Chief Investment Officer Matt Hougan even stated that the inflow of Ethereum ETF funds could significantly accelerate in the second half of 2025.
Institutions hold over 1.6 million ETH, and Ethereum will face a capital shift.
After traditional financial giants such as BlackRock, Fidelity, and ARK entered the spot ETF arena, and after the listed company Strategy sparked a wave of Bitcoin reserves, the narrative and pricing power of Bitcoin have shifted from the crypto-native community to Wall Street capital.
Now, this trend seems to be gradually repeating itself with Ethereum, as an increasing number of listed companies are engaging in large-scale capital layouts around Ethereum. According to Strategic ETH Reserve data, there are already 54 entities holding over 100 ETH, collectively holding over 1.6 million ETH, worth over $5.07 billion, equivalent to 35% of the total size of the ETH ETF. In the past two months, listed companies such as SharpLink Gaming, BitMine, Bit Digital, BTCS, GameSquare, and Bit Digital have announced the incorporation of ETH into their corporate balance sheets.
From the current composition of institutions entering Ethereum, they can be mainly divided into two camps. One camp is represented by SharpLink, backed by Ethereum supporters such as ConsenSys, Galaxy Digital, Pantera Capital, and Electric Capital, which are considered to be the early native forces of the Ethereum ecosystem banding together for self-rescue. As of now, SharpLink has cumulatively held over 280,000 ETH, surpassing the 242,500 ETH held by the Ethereum Foundation, becoming the world's largest institutional holder of ETH.
The other camp is represented by BitMine, which employs a Wall Street strategy by replicating Strategy's logic of Bitcoin reserves, incorporating ETH into financial reports and leveraging purchases. This institution is backed by Wall Street whiz Tom Lee, who is optimistic about Ethereum. While retaining its Bitcoin mining business, it has integrated ETH into its corporate balance sheet and currently holds over 160,000 ETH, ranking among the top five globally.
If the positions of these institutions continue to expand, the pricing power, discourse power, and even governance rights that were originally in the hands of developers, core researchers, the Ethereum Foundation, and early OG investors may face a reshuffle. However, from the current listed companies that are allocating ETH, most are generally facing financial pressure, aiming to hedge against inflation, boost stock prices, or seek short-term excess returns. Especially with the successful case of Strategy, they have yet to show a willingness to deeply bind with the construction of the Ethereum ecosystem. At the same time, these institutions struggle to compete with leading institutions in terms of allocation scale, risk tolerance, and holding period, limiting their substantial influence on Ethereum's ecological governance and long-term development. In other words, the true drivers of Ethereum's future trajectory will still be those top participants with strong financial strength.
Moreover, unlike the presence of soul evangelists like Michael Saylor (CEO of Strategy) in the Bitcoin reserve trend, Ethereum has yet to see a figure with both faith-based attributes and traditional capital influence. Whether Tom Lee can assume such a role is still to be observed. This somewhat limits Ethereum's overall dissemination power as an institutional asset in mainstream capital markets.
Of course, the Ethereum official maintains an open attitude towards institutional layouts. Ethereum founder Vitalik Buterin recently stated that institutions choose Ethereum because it is stable, secure, non-intrusive, and has a clear technological roadmap; the new co-executive director of the Ethereum Foundation, Tomasz Stańczak, also pointed out that the reason institutions favor ETH is due to its "ten years of uninterrupted operation, continuous upgrades, and commitment to censorship resistance and security."
However, Vitalik has also recently emphasized the importance of a dual governance mechanism and decentralization. Vitalik pointed out that dual governance provides an additional layer of independent defense, preventing the system from taking particularly harmful actions, while clearly including Ethereum users as stakeholders rather than relying solely on informal, 'atmosphere'-based alignment methods. He also emphasized that if decentralization remains at the level of slogans, Ethereum will face an existential crisis.
Overall, as Ethereum sparks a reserve trend, market attention and liquidity have undoubtedly increased significantly. However, if the price increase lacks strong support from actual ecological activity, it will ultimately be a castle in the air, an artificial mirage that is difficult to sustain. The core driving force for the stable growth of ETH's value remains the continuous innovation and increased activity within the Ethereum ecosystem, which directly determines the frequency of network usage and value accumulation. Currently, the Ethereum Foundation is focusing on deep reforms across multiple dimensions such as organizational structure, ecological collaboration, and technological evolution, striving to reshape ecological dominance, strengthen governance effectiveness, and thereby reverse external negative evaluations of Ethereum.
This article is a collaborative reprint from: PANews
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