Ethereum is taking a breather.
Ether’s red-hot rally over the last month may have screeched to a halt last week by slipping 0.6%. Yet there is a datapoint that signals its recent surge does mark, as one analyst put it, a “narrative shift.”
Over the last five trading days, investors have ploughed a net $249 million into BlackRock’s Ethereum ETF, which uses the ticker ETHA, according to data from SoSo Value, a research platform.
That’s quite the reversal from the largely net outflows in the exchange-traded fund from February to April.
Institutions return
Moreover, Ethereum’s TVL, the value of assets committed to the DeFi protocol, has jumped 21% in the last month, according to DefiLlama data.
The upshot: institutional investors as well as users appear to have finally warmed up again to the No. 1 blockchain in decentralised finance.
“Smart contract activity is back to near record levels, staking is ramping up, and ETH futures open interest is hitting records,” said Joel Kruger, a market strategist at LMAX Group, on Friday.
Still, Ethereum’s 6% dive on Friday shows the cryptocurrency’s fragility.
Solana, Ethereum’s top rival, notched a 3.2% increase the same day, and on Monday SOL was up about 4.3% compared to ETH’s 1.1% gain, according to CoinGecko data.
And last week, investors got spooked after a whale transferred about $159 million worth of ETH in a single transaction.
Fearing the holder, perhaps an institution, may dump the cryptocurrency, investors scrambled to sell and appeared to drive Ethereum’s swoon toward the end of the week.
Game changer
For all the short-term jitters, Ethereum is finally reaping the results of several long-term developments, said Youwei Yang, the chief economist at BIT Mining.
The Pectra upgrade will improve Ethereum’s layer 2 scalability and staking efficiency, he said.
Moreover, Consensys’ $435 million deal to stockpile Ether in a listed online betting company called SharpLink Gaming was a shot in the arm for a fledgling treasury strategy.
With SharpLink’s shares multiplying 13 times in the last ten days, chances are other companies will follow its lead.
But the game changer is the Ethereum ETF, Yang said.
While there’s a lot of buzz around potential Solana, XRP, or even Litecoin ETFs, Ether’s fund is up and running.
“That makes it a go-to option for institutions waiting and watching on the sidelines,” Yang said. “Ready to move when the timing feels right.”
Judging by inflows, it looks like some institutions aren’t on the sidelines anymore.
Crypto market movers
Bitcoin is up 1.7% over the past 24 hours and is trading at $107,376.
Ethereum ticked up 1.1% in the last day and is trading at $2,535.
What we’re reading
From budget hotel operator to Japan’s MicroStrategy: What is Metaplanet? ― DL News
Pump.fun’s $1 Billion ICO Has Caused Controversy. Can It Succeed? ― Unchained
Australia Charges Four Over $123M Crypto Money Laundering Ring — Decrypt
Crypto lender Morpho bucks DeFi trend as nonprofit absorbs development team ― DL News
Edward Robinson is the story editor for DL News. Contact the author at [email protected].
