Ethereum (ETH) soared past $4,000 on August 8, reaching its highest level this year after a sustained market rally, rising nearly 50% in the past month.

Data from CryptoSlate shows the coin peaked at $4,047 during U.S. trading hours. Notably, the last time ETH traded above $4,000 was in December 2024, when optimism surrounding Donald Trump's election victory drove a wave of cryptocurrency support in the U.S.

Meanwhile, data from CoinGlass shows the latest rally has caught bearish investors off guard. Short positions on ETH have incurred total losses of $134 million in the past 24 hours due to prices exceeding expectations.

Institutional Demand Drives ETH

Ethereum's breakthrough comes amid increasing institutional interest in this digital asset for their treasury reserves.

In the past month, major companies such as SharpLink and BitMine have accumulated significant amounts of ETH and announced multi-billion dollar buyback plans.

According to data from Strategic ETH Reserve, these institutions collectively hold over 3 million ETH - about 2.5% of the total supply - worth over $12 billion. BitMine leads with 833,100 ETH, worth approximately $5.2 billion.

Vitalik Buterin, co-founder of Ethereum, expressed cautious optimism about the growing interest of companies in ETH.

While welcoming this adoption, Buterin still warns companies not to over-leverage their ETH holdings.

According to Buterin:

"If you wake me up three years from now and tell me that treasury bonds led to the collapse of ETH... I guess they turned into a game of excessive leverage."

In addition to these companies, the Ethereum network has also seen a surge in adoption through exchange-traded funds (ETFs), with a record $5 billion of inflows recorded in July.

According to data from SoSo Value, this trend continues into the new month, with nine funds reporting only two days of outflows in August compared to four outflow days for their respective Bitcoin funds.

Additionally, traditional financial firms like BlackRock and Robinhood have expanded their operations around Ethereum, focusing on tokenizing real-world assets (RWA).

What Will Happen Next to Ethereum's Price?

Looking ahead, market optimism continues to rise along with expectations for Ethereum's price to keep increasing.

Cryptocurrency bettors on Polymarket, the leading decentralized prediction platform, believe there is a 60% chance ETH will surpass $5,000 by the end of this year. Meanwhile, 36% of traders think the price could reach $6,000, and 24% predict the price will rise to $7,000.

Notably, BitMEX co-founder Arthur Hayes is more optimistic about Ethereum's price reaching $10,000 by the end of the year.

Meanwhile, BitMine's predictions suggest a much higher potential, estimating the implied price of ETH at $60,000.