Growth of the Ethereum network, inflows from spot ETH ETFs, and rising prices attract new investors

Key Insights

The rise in ETH prices is fueled by heightened network activity and significant spot ETF inflows.

Current data indicates that overcoming the $2,800 mark will be challenging for ETH.

Since May 10th, Ether (ETH) has fluctuated within a tight range of $2,370 to $2,770. Yet, some indicators hint at potential upward movement. When considering layer 2 scaling solutions, Ethereum stands out in the blockchain realm for both sentiment and activity.

Even though Ether hasn’t succeeded in reaching its all-time high during the 2024-25 year cycle, the so-called Ethereum Killers fall short of their total locked value (TVL) of $66.6 billion. Ethereum commands a substantial 61% share of the market, while its two main competitors hold a combined 14%.

Over the past month, Ethereum’s base tier TVL has seen a 6% increase, powered by profits from platforms like Pendle, Ethena, and Spark. In contrast, the BNB chain’s TVL decreased by 6%, and Solana’s deposits fell by 2%. The recent increase in interest on competing blockchains during the Memocoin surge at the start of 2025 hasn’t proved sustainable.

Ethereum presents hurdles for many users, and it has diminished its share in distributed exchange (DEX) volumes due to high base fees. However, Layer 2 solutions collectively reported an impressive activity rate of $70 billion in 30 days, ensuring Ethereum retains its leading position. Key players include Base, Arbitrum, Unicane, and Polygon.

Interestingly, networks that aimed to rival Ethereum’s dominance in scalability don’t rank among the top six for DEX activity. For instance, Tron generated only $4.5 billion in volume over the last month, while Avalanche saw $4.2 billion. Meanwhile, Ethereum and its scaling solutions combined reached $136.8 billion.

Critics of Ether have raised questions about its sustainability, citing the modest $43.3 million in chain fees accumulated over the last month. Recent updates to the network have emphasized rollups and the introduction of large, low-cost temporary data packets, or Blobs. This shift has affected staker returns, as the suppression of ETH supply heavily relies on network fees.

Beyond its control on-chain, Ether stands out as the only altcoin with a US-approved spot exchange-traded fund (ETF). This advantage solidifies its $10 billion market, but competitors like Solana and XRP are awaiting guidance from the Securities and Exchange Commission, with analysts hoping for a decision by mid-October.

Since May 16, Spot ETH ETF has managed to avoid a single-day net outflow, amassing $837 million in net inflows during this time. While this pressure might seem modest against an average daily ETH volume of $4 billion on major exchanges, it indicates a growing interest from institutional investors.

Ether’s short-term supply, as seen through exchange deposits, has dropped to nearly 16.33 million ETH—an all-time low. Concurrently, 28.3% of total Ether supply is locked in staking. This trend could support positive price movements as demand rises.

The sharp rally of 48% for ETH from May 7th to May 14th underscores the gap between holders and potential buyers. Given the increasing demand reflected through Ethereum’s on-chain metrics and spot ETFs, a breakout above $2,800 seems more probable in the near future.