Analysts predict further growth for Ethereum amid increasing interest from institutional investors, which is already reflected in its price.
Ethereum Growth and Institutional Interest
Matt Hougan, the Director of Investments at Bitwise, forecasts continued growth for Ethereum in the coming months. He emphasized that the increase in institutional demand for Ethereum has significantly impacted its price. Although Ethereum experienced a dip in the first four months of the year, it has surged over 50% in the past month and gained more than 150% from its lowest point in April.
ETF Developments and Corporate Strategies
According to Hougan, Ethereum-based exchange-traded products (ETFs) were launched in July 2024. Initially met with limited interest, demand for these products escalated rapidly from mid-May onwards. Since May 15th, over $5 billion has flowed into spot Ethereum ETFs. Additionally, some companies have started to disclose their strategies for holding Ethereum in their treasuries. Institutions like Bitmine and SharpLink have publicly announced their Ethereum-focused reserves.
> "ETFs and Corporate Treasuries have purchased 2.83 million ETH since May 15, exceeding $10 billion at today’s prices. During the same timeframe, the purchases were 32 times the new supply. This scenario explains the increase in ETH price." CITE_W_A
Future Projections and Expected Dynamics
Hougan anticipates that this surge in demand could persist in the upcoming months. The renewed institutional interest and advancements in the stablecoin and tokenization sectors are expected to sustain ETF inflows into Ethereum for the long term. Hougan also noted that the trend of institutional companies holding Ethereum reserves is likely to accelerate.
> "Looking ahead, ETFs and Treasury Companies may acquire $20 billion worth of ETH over the next year. At current prices, this amounts to 5.33 million ETH. The network is expected to produce around 0.80 million ETH in the same period. Thus, demand could be approximately seven times the supply." CITE_W_A
At the time of writing, Ethereum is trading at $3,705, experiencing a 1% loss over the past 24 hours. Experts predict the price will stay on an upward trend in the medium to long term. The increase in institutional activities and volume in Ethereum is emerging as a significant market driver.
