Ethereum Faces New Capital Landscape: Institutional Reserve Battle Triggers Market Rebound

Recently, the price of Ethereum has been rising continuously, and market confidence has significantly improved. This rebound is largely due to the active influx of institutional funds. With more institutional participants accelerating their entry, Ethereum may face a significant change in the capital landscape.

Spot ETF and Institutional Reserves Drive Market Turnaround

The launch of the Ethereum spot ETF was once seen as a key milestone for entering the mainstream financial market, with the market widely expecting it to significantly boost its price and ecosystem. However, after the ETF launch in July 2024, the market reacted lukewarmly, with ETH price performance remaining weak and the ETH/BTC exchange rate continuing to decline, leading to a noticeable blow to investor confidence.

Data shows that since the ETF was launched, the cumulative net inflow of funds is approximately $5.76 billion, accounting for 3.87% of Ethereum's total market value. In the past 13 months, there were only three months with net outflows, totaling $930 million, indicating a robust capital absorption trend overall.

However, the steady inflow of ETF funds has not effectively supported the price of Ether. From the launch of the ETF to the announcement of the first ETH reserve company establishing a strategic reserve, the maximum increase in the price of Ether was only 16.55%, while the maximum decrease reached as high as 63.34%. In contrast, after the launch of the Bitcoin spot ETF, the price of BTC surged by 153.3%, demonstrating a stronger market performance.

In the past two months, the market sentiment has begun to shift. On one hand, ETH has experienced a technical rebound after a significant adjustment; on the other hand, the Ethereum Foundation has initiated reforms to its internal governance mechanisms, and public companies have started to include ETH in their balance sheets, injecting new narrative momentum into ETH.

Since several companies have successively announced their allocation of ETH, the price of ETH has recorded a cumulative increase of 22.29%, significantly outperforming Bitcoin's performance of 7.9% during the same period. This round of Rebound is not only based on asset revaluation but also benefits from the gradual formation of a new narrative around strategic reserve assets.

The current market sentiment is bullish, with several industry insiders publicly expressing optimism about the long-term value of Ethereum. At the same time, institutions are accelerating their entry, with Ethereum spot ETFs recording over $1 billion in net inflows for nearly two consecutive months.

Institutional Holdings Surge, Ethereum Faces Capital Landscape Restructuring

As traditional financial giants enter the spot ETF arena and listed companies initiate a wave of digital currency reserves, the narrative and pricing power of cryptocurrencies are shifting from the native community to Wall Street capital.

This trend seems to be repeating itself with Ethereum. Data shows that there are 54 entities holding more than 100 ETH, collectively holding over 1.6 million ETH, worth more than $5.07 billion, which accounts for 35% of the total scale of ETH ETFs. In the past two months, several listed companies have announced that they will include ETH in their balance sheets.

From the current stage of institutional involvement in Ethereum, there are mainly two camps. One camp is represented by a certain company, backed by multiple supporters of the Ethereum ecosystem, which is considered a collective self-rescue of the early native forces of the ecosystem. The other camp is represented by a certain company employing a Wall Street approach, which involves replicating the Bitcoin reserve logic by incorporating ETH into financial reports and leveraging purchases.

If the positions of these institutions continue to expand, the pricing power, voice, and even governance of Ethereum may face a reshuffle. However, looking at the listed companies currently holding ETH, most are facing financial pressure, aiming to hedge against inflation, boost stock prices, or seek short-term gains, and have not yet shown a willingness to be deeply tied to the construction of the Ethereum ecosystem.

The Ethereum official has an open attitude towards institutional layout. The founder of Ethereum recently stated that institutions choose Ethereum because it is stable, secure, does not go offline, and has a clear technical roadmap. At the same time, he also emphasized the importance of dual governance mechanisms and decentralization, pointing out that if decentralization remains only at the level of slogans, Ethereum will face a survival crisis.

Overall, as Ethereum sparks a reserve trend, the market's attention and liquidity have undoubtedly increased significantly. However, if the price rise lacks strong support from actual ecological activity, it will be difficult to sustain. The true core driving the stable growth of ETH value remains the continuous innovation and increase in activity within the Ethereum ecosystem. Currently, the Ethereum Foundation is undertaking in-depth reforms from multiple dimensions, aiming to reshape ecological leadership, enhance governance effectiveness, and thereby reverse external negative perceptions of Ethereum.