Institutional Confidence Grows

Ethereum has benefitted from newly apparent institutional confidence, accelerated by the return of Donald Trump to the White House.

Spot Ethereum exchange-traded funds (ETFs) have recorded strong inflows. Across the preceding three weeks, they gained $578 million, with $286 million specifically last week.

A comparison shows Bitcoin ETFs saw net outflows last week ($157 million after six weeks of inflows).

Derivatives markets also signal strength, with Ethereum open interest surging past $5 billion on Deribit, a long-to-short ratio favoring calls. whale activity has increased.

Fundamental Tailwinds Pick Up Steam

The market has underscored various fundamental developments.

Recent ETH Global updates outlined scalability plans for the network’s base layer aiming for significant expansion.

Cryptocurrency treasury diversification, like SharpLink Gaming’s $435 million ETH raise boosting stock value, also adds to the narrative.

The U.S. SEC’s clarification on staking ETF rules, despite current setbacks, appears to open the gateway for future products which analysts expect approval soon.

Legacy of Prior Weakness

For context, Ethereum signs hit multi-year troughs; early April saw prices drop below $1,400. Prediction markets currently imply potential upside, though not without challenges.

Eyes on the Headwinds

Despite the rally, macroeconomic instability and regulatory concerns posture risks to Ethereum’s recovery. Previous market volatility linked to U.S. tariff threats and current proposed sanctions pauses are stark reminders.

CoinMarketCap cautions that Ethereum’s performance hinges heavily on “institutional tailwinds [versus] technical and macroeconomic headwinds.”