Simply put
- The Spot Ethereum ETF saw an influx of $2.3 billion in the US this month, which is roughly equivalent to about 500,000 ETH.
- Since the “Merge” occurred in 2022, the Ethereum network has issued around 450,000 ETH.
- Standard Chartered reports that while the Ethereum Treasury has made significant purchases of ETH, ETFs still represent a larger source of demand.
The trading happening on the Spot Ethereum Exchange is really a response to soaring asset prices in the US, which are pretty much at an all-time high, somewhat balancing out the ETH that has been issued this year.
Crypto data shows that the Spot Ethereum ETF attracted $2.3 billion (or around 500,000 ETH) this month. The “Merge” was a pivotal upgrade that changed Ethereum’s mining process significantly.
This recent surge in trading is notable, with investors putting in $1 billion into the nine-spot Ethereum ETF just this past Monday.
Ethereum treasury companies like Bitmine Immersion Technologies and Sharplink Gaming have recently garnered attention as new demand sources, acquiring billions in ETH rapidly. However, analysts from investment banks suggest these companies are playing more of a supplemental role lately.
There’s been talk about Ethereum potentially reaching a year-end price target of $7,500. Analysts noted that since June, the Ethereum Treasury has bought about 2.3 million ETH, which accounts for approximately 1.9% of the available supply, while ETFs have made up about 3.8%.
Analysts believe that ETH purchases are likely to keep going, particularly based on public plans from a related finance company, suggesting they could increase their holdings up to 10% of all circulating ETH.
According to Coingecko, Ethereum was trading at around $4,740 on Tuesday, reflecting a 5% uptick. Although it reached $4,000 last December, it still hasn’t hit the nearly $4,900 peak from the pandemic era in 2021. Still, it’s looking pretty close to that mark since the latter half of that year.
Back during that time, Ethereum’s consensus model was mirroring Bitcoin’s. Bitcoin was all about complex calculations to keep its network secure, rewarding miners with freshly issued ETH. But this changed in 2022 when staking became central to Ethereum’s security.
Participants in the network earn ETH for verifying transactions through staking. Unlike Bitcoin, Ethereum doesn’t have a hard cap of 21 million tokens, but if all ETH were staked, the annual increase would only be about 1.5%. Interestingly, since the merge in September 2022, the total supply of Ethereum has only gone up by 0.13%.
Annually, around 683,000 ETH (roughly $1.8 billion) is burned or removed from circulation, based on the current prices.
With the latest developments around the Stablecoin Act, there’s a sense among some analysts that dollar-pegged tokens on Ethereum might see a significant boost as Wall Street companies roll out their own offerings.
“Stablecoins currently make up about 40% of all blockchain fees, with Ethereum accounting for over half of those,” one analyst from Standard Chartered noted. “We anticipate growth in the Stablecoin sector, which will directly impact fees.”
Myriad users believe Ethereum is not only on track to hit its all-time high in 2025 but might also surpass the $5,000 threshold for the first time. It seems there’s about an 87% probability of such an event occurring.
