Toward new records: What is happening with Ethereum price

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Toward new Ethereum records

Inflows into Ethereum ETFs

Ethereum’s price hit a local high on August 12, climbing above $4,400. Two main factors acted as the catalyst for this growth: inflows into spot Ethereum ETFs and announcements from two companies about purchasing large amounts of coins for their treasuries. Let’s break it down.

The week began with the largest-ever daily inflow of funds into spot Ethereum exchange-traded funds. In just one day, Ethereum ETFs attracted over $1 billion in total inflows. For comparison, Bitcoin ETFs collected just $178 million on the same day.

Most analysts believe this happened because key indicators turned bullish, ETH’s price rose 45% over the month, and exchange balances fell to a nine-year low — 15.28 million ETH. However, NovaDius President Nate Geraci has a different opinion. According to him, the reason is that investors simply did not understand Ethereum before, but now that has changed.

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On Tuesday, inflows into Ethereum ETFs didn’t stop, with another $524 million going into these funds. But let’s move on to the second catalyst.

The Ethereum treasury race

Two companies holding the largest ETH reserves in the world announced major purchases of the asset. Mining company BitMine Immersion Technology (holding 1.2 million ETH worth $5 billion) announced it plans to raise $24.5 billion through a new stock offering to buy more coins. In the future, the company even aims to acquire up to 5% of Ethereum’s total supply.

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That same day, another company, SharpLink (holding 598,000 ETH worth $2.6 billion), raised $389 million, completing a share placement for institutional investors. The company’s management stated it would allocate nearly all the raised funds to purchase ETH.

As we can see, more and more large companies are viewing ETH as a secondary treasury reserve asset after Bitcoin, helping the cryptocurrency’s price climb 28% over the week.

Ethereum’s milestones and profit-taking

Along with Ethereum’s price, its market capitalization is also rising. As of today, it has exceeded $550 billion, surpassing giants like Netflix and Mastercard, and breaking into the top 25 global assets.

Ranking of the largest assets by market capitalization. Source: Companies Market Cap

On this backdrop, the Ethereum Foundation — a nonprofit organization dedicated to the development and support of the cryptocurrency’s ecosystem — sold at least 2,795 ETH worth around $12.7 million on Tuesday evening. The sale coincided with ETH’s rise above $4,500, marking the yearly high at the time. However, this is not a classic case of profit-taking for speculation. Instead, it’s about funding ecosystem development and maintaining the project’s decentralization.

Vitalik Buterin: billionaire again

Meanwhile, Ethereum co-founder Vitalik Buterin has recently regained his billionaire status. This happened right after ETH’s price surpassed $4,000. At present, his portfolio holds 240,042 ETH, worth over $1.1 billion — not counting his other assets.

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The first time Buterin became a billionaire was in May 2021, when ETH’s price first exceeded $3,000. At that time, he owned much more — 333,500 ETH — and had previously stated that he had never held more than 0.9% of Ethereum’s total supply.

Ethereum’s prospects

This year, Ethereum turned 10 and has achieved a lot in that time. It has always been in Bitcoin’s shadow, strongly correlated with its price. But this time, it’s moving independently of the leading digital asset. While BTC is showing volatility, ETH is steadily growing toward its all-time high of $4,878.

Right now, there are strong factors driving ETH’s price forward — inflows into Ethereum ETFs and the growing popularity of ETH treasuries. However, there is another potential catalyst: the launch of staking within Ethereum ETFs. If the U.S. Securities and Exchange Commission (SEC) approves this feature, the second-largest cryptocurrency could very well aim for new records.

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