After more than a year of being sidelined by memecoins and rival blockchains, Ethereum is finally picking up momentum.
Fresh off an almost 50% uptick in the last 60 days, market analysts say there’s more room for the price to grow.
“An [Ethereum] price of $7,000 no longer seems unrealistic.”
Ethereum traded for $3,600 on Friday, about 50% below Kara’s target, which would also be a new all-time high. Ethereum’s current price record is the $4,878 achieved four years ago.
Ethereum’s current price uptick comes amid a crypto rally that has seen the overall industry break the $4 trillion barrier for the first time.
The second biggest cryptocurrency has enjoyed a steady inflow of institutional capital via exchange-traded funds and its adoption as a corporate treasury reserve asset, just like Bitcoin.
Companies like SharpLink Gaming and Bitmine have begun acquiring Ethereum for their corporate balance sheets, a move which analysts say is indicative of the asset’s broadening appeal among institutional investors.
“The preference for assets like [Ethereum] also speaks to the growing demand for yield by the buyers of many corporate treasury vehicles,” Coinbase analysts wrote in a report on Friday.
But they aren’t simply buying Ethereum to diversify their corporate holdings, but also to earn yield.
“Many of these companies have committed to staking their [Ethereum] to earn yield, and some are even locking up their supply via DeFi integration, reflecting a fundamental shift from speculative trading to strategic asset allocation,” the Coinbase report stated.
And Ethereum could gain even more momentum with the passage of the Genius Act by the US Congress.
The landmark bill provides some regulatory clarity for stablecoins, and could spark a bigger Ethereum renaissance, according to some market participants.
That’s because Ethereum’s blockchain commands the largest share of stablecoin activity, almost half of the $259 billion market, according to DefiLlama data.
Kara said the passage of the Genius Act presents a “great opportunity” that could “significantly increase the valuations of blockchains that are home to stablecoins.”
Coinbase analysts said that realisation could even be one of the factors driving increased corporate appetite for Ethereum.
They said Ethereum has established itself as a viable asset to “express a view on the theme of stablecoins and tokenisation,” which is why at least 10 Ethereum-dedicated corporate treasuries have accumulated about $2.5 billion worth of the cryptocurrency.
