While Bitcoin had recently surpassed the $120,000 mark and hit multiple new all-time highs, it saw a reversal on Tuesday, falling to its lowest point in five days, at one point dropping below $117,000. In contrast, Ethereum defied this downward trend, rising 4% in 24 hours to trade around $3,128, extending its weekly gains to 20%. This continued momentum pushed Ethereum to its highest level in five months.
Greg Magadini, Director of Derivatives at Amberdata, commented that “After two years of underperformance, ETH is gaining traction again.” This is a significant observation, considering Bitcoin had surged nearly 300% over the past two years, while Ethereum had climbed a more modest 60% and was even down almost 8% year-to-date prior to its recent rally. Magadini noted that Ethereum’s resilience on Tuesday, despite the U.S. House of Representatives failing to pass a measure that would enable votes on three major crypto bills, indicated “crypto-specific trades holding up ETH.”
Institutional Interest and Staking Optimism
A key factor fueling Ethereum’s ascent is the accelerated institutional accumulation. Several publicly traded companies have been adding Ethereum to their balance sheets this week. Online gambling marketing firm SharpLink Gaming, for instance, recently purchased $225 million worth of ETH, bringing its total holdings to approximately 280,000 ETH. Bitcoin miner BitMine Immersion Technologies also acquired more Ethereum, pushing its total holdings of the token above the $500 million mark. These substantial corporate investments signal increasing confidence in Ethereum as a treasury asset.
Furthermore, investors in Ethereum have grown increasingly optimistic about the potential approval of Ethereum exchange-traded funds (ETFs) with staking functionality by the U.S. Securities and Exchange Commission (SEC). This optimism follows a statement from the SEC in May clarifying that staking activities would not be classified as securities transactions. BlackRock notably filed a proposal to modify its iShares Ethereum Trust (ETHA) to include staking functionality, a move that could significantly enhance the ETF’s appeal by allowing it to earn network rewards for shareholders. The SEC’s evolving stance and the approval of a Solana staking ETF have created a favourable environment for similar Ethereum products.
The burgeoning notional open interest in Ethereum futures, which recently exceeded 12-month highs—levels last seen when ETH was trading around $4,000 in December—further underscores growing market participation and positive sentiment for the asset. This confluence of institutional buying, regulatory clarity, and strong derivatives activity suggests a robust foundation for Ethereum’s continued upward momentum, distinguishing its performance from Bitcoin’s recent short-term retreat.
