Ethereum Welcomes a New Capital Landscape: Institutional Reserve Competition Becomes a New Turning Point in the Market

Recently, as the price of Ethereum continues to rise, market confidence in it has clearly rebounded. This wave of recovery is largely due to the active influx of institutional funds. With more institutional participants accelerating their entry, Ethereum may face a significant change in its capital landscape.

Market Performance After the Launch of Spot ETF

The launch of the Ethereum spot ETF was once seen as an important connection point to traditional finance, with the market generally expecting it to provide a significant boost to Ethereum. However, since the ETF's launch in July 2024, the market response has not been as strong as expected, with ETH price trends remaining weak and the ETH/BTC exchange rate continuing to decline, significantly impacting investor confidence.

Data shows that since the launch of the ETF, the cumulative net inflow of funds has been approximately $5.76 billion, accounting for 3.87% of Ethereum's total market capitalization. In the past 13 months, there were only three months of net outflows, indicating a stable capital absorption trend overall.

However, the steady inflow of ETF funds has failed to effectively support the price of ETH. Since the launch of the ETF until the first ETH reserve company announced the establishment of a strategic reserve, the maximum increase in the price of ETH was only 16.55%, while the maximum decline reached 63.34%. In contrast, after the launch of the Bitcoin spot ETF, the price of BTC surged by as much as 153.3%, showing a stronger performance.

Market Trend Shift

In the past two months, the market situation has begun to gradually improve. On one hand, ETH has shown a technical rebound after undergoing deep adjustments; on the other hand, the Ethereum Foundation has initiated reforms in its internal governance mechanisms, coupled with listed companies beginning to include ETH in their balance sheets, injecting new momentum into ETH.

Since several companies have announced their allocation of Ether, the price of Ether has recorded a cumulative increase of 22.29%, significantly outperforming Bitcoin's 7.9% performance during the same period. This round of rebound is not only based on asset re-evaluation but also benefits from the gradual formation of a new narrative around strategic reserve assets.

The current market sentiment is strongly bullish, with several well-known industry figures publicly expressing optimism about the long-term value of Ethereum. At the same time, institutions are accelerating their entry, with the Ethereum spot ETF recording over $1 billion in net inflows for nearly two consecutive months.

Institutional positions significantly increased

As traditional financial giants rush into the spot ETF arena and publicly listed companies embark on a Bitcoin reserve wave, the narrative and pricing power of Bitcoin have shifted from the crypto-native community to the hands of Wall Street capital. Now, this trend seems to be repeating itself with Ethereum.

Data shows that there are 54 entities holding more than 100 ETH, collectively holding over 1.6 million ETH, worth more than $5.07 billion, which accounts for 35% of the total size of ETH ETFs. In the past two months, several listed companies have announced that they will include ETH in their balance sheets.

From the perspective of the institutional composition entering Ethereum, it can be mainly divided into two camps: one camp is the early native forces of the Ethereum ecosystem banding together for self-help; the other camp is the Wall Street approach that replicates the Bitcoin reserve logic.

Potential Impacts of Changes in Capital Structure

If the holdings of these institutions continue to expand, the pricing power, discourse power, and even governance power that were originally in the hands of developers, core researchers, the Ethereum Foundation, and early investors may face a reshuffle. However, most publicly listed companies holding ETH are currently facing financial pressure, aiming to hedge against inflation, boost stock prices, or seek short-term gains, and have not yet shown a willingness to be deeply tied to the construction of the Ethereum ecosystem.

At the same time, these institutions find it difficult to compete with leading institutions in terms of allocation size, risk tolerance, and holding periods, which limits their substantial influence on Ethereum ecosystem governance and long-term development. Those who can truly dominate the future direction of the Ethereum ecosystem are still the top participants with strong financial strength.

The Ethereum official has an open attitude towards institutional layouts. The founder stated that institutions choose Ethereum because it is stable, secure, does not experience downtime, and has a clear technical roadmap. However, he also emphasized the importance of a dual governance mechanism and decentralization, pointing out that if decentralization remains only a slogan, Ethereum will face a survival crisis.

Overall, with Ethereum triggering a wave of reserves, the market's attention and liquidity have undoubtedly increased significantly. However, if the price rise lacks strong support from actual activity in the ecosystem, it will be difficult to sustain. The core that truly drives the steady growth of ETH's value remains the continuous innovation and increased activity within the Ethereum ecosystem. Currently, the Ethereum Foundation is undertaking deep reforms across multiple dimensions, aiming to reshape the ecological dominance and strengthen governance effectiveness, thereby reversing the negative perception of Ethereum from the outside.