Recently, the surge in Ethereum can be described as unprecedented. Many attribute it to the passing of the stablecoin bill, which is certainly a factor, but this week there was another significant piece of news that many overlooked — a representative from Nasdaq, BlackRock, submitted an application to the U.S. Securities and Exchange Commission (SEC) to include staking services in the asset management company's Ethereum ETF (ETHA).
ETHA staking service: A 'hot cake' for institutional investors.
This new service, ETHA, is essentially a 'wealth key' tailored for institutional investors. Through ETHA, investors have the opportunity to obtain staking rewards accumulated during the staking process under the Proof of Stake (PoS) consensus algorithm without having to pay capital gains tax. For institutional investors, this significantly reduces investment costs and increases profit potential. Institutions that have previously hesitated to invest in Ethereum due to complicated tax issues and staking processes may now jump in. After all, being able to share in the benefits brought by the development of the Ethereum ecosystem while obtaining returns in a more convenient and low-cost manner is certainly appealing. This undoubtedly opens a wide door for institutional investors to earn returns by holding Ethereum, leading to a natural rise in Ethereum prices with the influx of large institutional funds.
Data confirms: Ethereum staking and ETF inflows reach new highs.
From a data perspective, the number of Ethereum staked reached an astonishing 36 million in July, setting a historical high and accounting for over 29% of the circulating supply. This indicates strong market confidence in Ethereum, with more and more investors optimistic about Ethereum's development prospects under the PoS mechanism, willing to lock in Ethereum long-term for staking rewards.
Meanwhile, in the past two weeks, the funds flowing into Ethereum ETFs have also reached historical highs. This not only indicates that institutional investors are actively positioning themselves but also reflects the keen sense of retail investors. In a relatively asymmetric information environment, retail investors can sense market changes and enter the market following the trend, demonstrating the overall professionalism and sensitivity of cryptocurrency investors is continuously improving.
Personal Insight
The current surge in Ethereum is the result of a combination of factors. In addition to the aforementioned positives, the ongoing improvement of the Ethereum ecosystem and the continuous expansion of applications such as DeFi and NFTs also provide solid support for Ethereum's value. However, the cryptocurrency market has always been highly volatile. Although the current situation for Ethereum looks very good, investors should not be blindly optimistic. With more capital influx, market competition and uncertainty will also increase, such as changes in regulatory policies and security risks caused by technical vulnerabilities, all of which may impact the price of Ethereum.
While investors enjoy the benefits of Ethereum's rise, they must remain rational and conduct risk assessments and asset allocation. For retail investors, although they have keenly seized the opportunity this time, they must continue to learn and accumulate experience to enhance their market judgment skills in order to navigate the cryptocurrency market, which is full of opportunities and challenges, more steadily and further.
