- Ether has rallied nearly 110% in the last 3 months.
- Analysts point to treasury companies and stablecoin buzz as drivers.
- Bearish bets are piling up.
Ethereum continues to move from strength to strength.
And institutional investors are taking notice.
Money pouring into the market’s spot Ether exchange-traded funds made up the vast majority of spot crypto fund investments last week, according to new research from CoinShares.
Of the $1.9 billion in investor money scooping up these funds, Ether accounted for more than 84% of that figure.
That’s the second-largest amount of money investors have spent on Ethereum funds in a week since their launch last July.
The investment also outpaced that of Bitcoin.
Over the same period, various Bitcoin ETFs experienced net divestment to the tune of $175 million.
So, what’s driving the vibe shift?
Though Ethereum has long been a laggard during much of this year’s eye-watering rally, analysts have pointed to three key drivers behind growing interest in the $459 billion cryptocurrency.
Ether takes flight
First, the rise of public companies adding millions in Ether to their balance sheet.
Firms such as BitMine, GameSquare, and SharpLink have collectively purchased more than 937,753 Ether worth more than $3.5 billion, according to CoinGecko.
Ethereum co-founder Joe Lubin, who led the online gaming company SharpLink through its crypto pivot, said that the firm will do many of the same financial manoeuvres as Michael Saylor’s Strategy.
But because Ethereum is so much different from Bitcoin, Lubin told DL News that they “can also do so much more.”
Second, analysts are touting the passage of landmark stablecoin legislation in the US as a key driver behind the uptick in Ether.
That’s because more than 50% of all stablecoins and tokenised financial assets are minted on the Ethereum network.
“Banks, payment players, and fintechs would continue buying operational [Ethereum] to pay transaction fees for deploying stablecoins and tokenised assets on the blockchain,” Bernstein analysts said in July.
Finally, Ether’s smaller size compared to Bitcoin means that it’s far more sensitive to outsized investment, wrote analysts at QCP Capital, a Singapore-based trading firm.
Bears take aim
But that doesn’t mean bears aren’t waiting in the wings.
As Ethereum approaches $4,000 rapidly, there is approximately $2.5 billion in short trades betting on the asset to decline in price, according to Coinglass data.
Crypto market movers
- Bitcoin has dropped 1% in value over the past 24 hours and is trading at $118,300.
- Ethereum also shed nearly 1% in the same period to $3,800.
What we’re reading
- Euler DAO votes to boost revenue 414% with new fees amid red-hot lending competition — DL News
- What everyone’s missing with Solana — Milk Road
- DOJ Considers Charges Against Dragonfly Over Tornado Cash Investment — Unchained
- CZ’s wealth inches closer to Satoshi’s as BNB surges 32% — DL News
Liam Kelly is a Berlin-based reporter for DL News. Got a tip? Email him at liam@dlnews.com.
