Author: Nancy, PANews
In recent days, as ETH prices continue to rise, the Ethereum reserve arms race has intensified, with market confidence significantly warming. This rebound is largely attributed to the active influx of institutional funds. However, with more institutional participants accelerating their entry, Ethereum may face a capital upheaval.
Wall Street enters through ETFs, and the narrative of listed companies' reserves brings new turning points.
The launch of the Ethereum spot ETF was seen as an important milestone towards Wall Street and traditional finance, with the market generally 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; ETH's price trend 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 sell-offs may be driven by operational needs, the sensitivity of market sentiment has amplified the interpretation of these sell-offs, and the voice of market pessimism towards Ethereum is growing stronger.
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. From the flow of funds, in the past 13 months, only three months saw net outflows, with a total outflow of $930 million, indicating a robust trend in fund absorption overall.
However, the stable inflow of ETF funds has not formed effective support at the ETH price level. CoinGecko data shows that from the launch of the ETF until the first ETH reserve company, SharpLink Gaming, announced the establishment of an Ethereum strategic reserve (May 27, 2025), the maximum price increase of ETH was only 16.55%, while the maximum drop reached as high as 63.34%. In contrast, since the launch of the Bitcoin spot ETF on January 11, 2024, BTC's price has increased by as much as 153.3%, demonstrating a stronger market performance. The market performance of Ethereum and Bitcoin under the backing of ETFs forms a stark contrast.
It was only in the past two months that the market sentiment began to gradually shift. On one hand, ETH experienced a technical rebound after a deep adjustment; on the other hand, the Ethereum Foundation initiated reforms of its internal governance mechanisms, coupled with listed companies starting 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% performance during the same period. This rebound is not only based on asset revaluation but is also benefiting from the gradual formation of a new narrative around strategic reserve assets.
Currently, the market sentiment is bullish, as ARK Invest founder Cathie Wood recently publicly stated that Ethereum's long-term value is severely underestimated; Varys venture capital executives and Multicoin co-founders 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 funds into Ethereum ETFs may significantly accelerate in the second half of 2025.
Institutions hold over 1.6 million ETH, and Ethereum is set to welcome a capital upheaval.
After traditional financial giants like BlackRock, Fidelity, and ARK began entering the spot ETF arena, and listed company Strategy sparked a Bitcoin reserve tide, the narrative and pricing power of Bitcoin have shifted from the crypto-native community to Wall Street capital.
Today, this trend seems to be gradually repeating itself in Ethereum, with more and more listed companies making large-scale capital layouts around Ethereum. According to Strategic ETH Reserve data, there are already 54 entities holding more than 100 ETH, collectively holding over 1.6 million ETH, worth over $5.07 billion, equivalent to 35% of the overall 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 plans to incorporate ETH into their balance sheets.
From the current composition of institutions entering Ethereum, they can be divided into two factions. One faction is represented by SharpLink, backed by Ethereum supporters such as ConsenSys, Galaxy Digital, Pantera Capital, and Electric Capital, and is seen as a self-rescue collective of early native forces within the Ethereum ecosystem. As of now, SharpLink has accumulated over 280,000 ETH, surpassing the 242,500 ETH held by the Ethereum Foundation, making it the world's largest institutional holder of ETH.
The other faction is represented by BitMine's Wall Street approach, which replicates Strategy's logic of Bitcoin reserves, incorporating ETH into financial reports and leveraging purchases. This institution is backed by Wall Street's 'whiz kid' and Ethereum supporter Tom Lee, retaining Bitcoin mining operations while incorporating ETH into the company's balance sheet, with current holdings exceeding 160,000, placing it among the top five globally.
If the scale of these institutions' holdings continues to expand, the pricing power, voice, and even governance rights that were originally held by developers, core researchers, the Ethereum Foundation, and early OG investors may undergo a reshuffle. However, from the current listed companies allocating ETH, most are facing financial pressure, aiming to hedge against inflation, boost stock prices, or seek short-term excess returns, especially in light of Strategy's successful case, without showing 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 periods, limiting their substantive influence on Ethereum's ecosystem governance and long-term development. In other words, those top participants with strong financial strength will still be the ones who can truly lead the future direction of the Ethereum ecosystem.
Moreover, unlike Bitcoin's reserve tide, which has a soul preacher like Michael Saylor (Executive Chairman and Founder of Strategy), Ethereum has yet to see a figure who possesses both faith attributes and traditional capital influence; whether Tom Lee can become a character like Saylor remains to be observed. This somewhat limits the overall transmission capability of Ethereum in the mainstream capital market as an institutional asset.
Of course, the Ethereum official has an open attitude towards institutional layouts. Ethereum founder Vitalik Buterin recently stated that institutions choose Ethereum because it is stable, secure, does not go down, and has a clear technical roadmap; while Tomasz Stańczak, the newly appointed co-executive director of the Ethereum Foundation, also pointed out that institutions favor ETH because it has 'operated continuously for ten years, continuously upgraded, and has always been committed to censorship resistance and security.'
However, Vitalik recently emphasized the importance of dual governance mechanisms and decentralization. Vitalik pointed out that dual governance provides an additional independent layer of defense to prevent 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 stressed that if decentralization remains at the slogan level, Ethereum will face a survival crisis.
Overall, as Ethereum sparks a reserve tide, the market's attention and liquidity have undoubtedly seen a significant boost. However, if the price rise lacks strong support from actual ecosystem activity, it will ultimately be an illusion, difficult to sustain. The true core driving ETH's stable growth is the continuous innovation and increased activity within the Ethereum ecosystem, which directly determines the network's usage frequency and value accumulation. Currently, the Ethereum Foundation is focusing on deep reforms across multiple dimensions, including organizational structure, ecosystem collaboration, and technological evolution, in an attempt to reshape ecological dominance, strengthen governance effectiveness, and reverse the negative perceptions of Ethereum.
(The above content is excerpted and reproduced with the authorization of partner PANews; original text link)
"Ethereum welcomes a capital upheaval! ETH price rebounds significantly, institutional reserves become a new turning point." This article was first published on (Block客).
