Ethereum Rises Again—What’s Powering the Rally?

Ethereum (ETH) is trading at $3,700 for the first time this year, marking a comeback of sorts for the second-largest global cryptocurrency. Why is Ethereum back on the road to success despite all the skeptics?

Just three weeks ago, crypto markets were still preoccupied with the question of whether Ethereum was at risk of a free fall below the $2,000 mark. This discussion is now off the table, as Ethereum reached a yearly high overnight, trading at around $3,700. And there are good reasons why ETH, the number two among global cryptocurrencies, is once again feeling the wind in its sails.

Young companies back ETH

One trigger for the current Ethereum rally was certainly public companies like Bitmine Immersion (BMNR), which, following MicroStrategy’s example, have made the accumulation of crypto reserves their business model.

While MicroStrategy is focusing on Bitcoin, Bitmine Immersion, Sharplink Gaming (SBET), and others are now focusing on ETH. Just yesterday, Bitmine Immersion announced in a press release that it now holds more than 300,000 ETH with a total value of more than $1 billion.

Ethereum ETFs experience record week

These reserves must be purchased by ETH companies at market prices, which noticeably supports the ETH price curve. Furthermore, with prominent advocates such as Tom Lee (Bitmine Immersion) and ETH co-founder Joseph Lubin (Sharplink Gaming), Ethereum is gaining public attention – this is also having an impact on the strategies of private investors.

The trend towards ETH is also clearly visible in Ethereum ETFs, which, according to data from SoSo , experienced the most successful days in their almost one-year history on Wednesday and Thursday. Almost 730 million US dollars flowed into Ethereum ETFs on Wednesday, compared to just over 600 million US dollars Thursday. The Ethereum ETFs are fully backed by ETH, and accordingly, massive amounts of ETH are currently being purchased for them.

Institutional investors meet pent-up demand for Ethereum

Ethereum ETFs could gain even more momentum if the Securities and Exchange Commission (SEC), restructured by US President Donald Trump, also allows them to be staked. This seems within reach, and from then on, ETH ETFs would generate additional passive income through staking, which could be passed on to investors and significantly increase the attractiveness of the ETFs.

Analysts at Wintermute and Coinshares recently noted that, relatively speaking, ETH financial instruments have actually been attracting more capital than Bitcoin for weeks – keyword: pent-up demand.

Genius Stablecoin laws in the US a boon for Ethereum

The third and likely decisive impetus toward Ethereum’s annual high came from US politics yesterday. After three days of tough negotiations, the House of Representatives approved three groundbreaking crypto bills. ETH will benefit from all three, and Genius is already before President Donald Trump for his signature.

Genius legalizes stablecoins in the US, and data from DeFiLlama shows that with nearly $130 billion in stablecoins, more than 50 percent of the total volume in Ethereum DeFi is deposited in this space. One observer says: “When a network like Ethereum is collateralizing hundreds of billions of US dollars, the coin (here, ETH) itself can’t possibly be worth less.”

Conclusion: Ethereum returns to the big stage

Despite its recent successes, experts believe it’s a challenge for Ethereum to finally give ETH a catchy slogan. “Digital gold” has become common practice for Bitcoin, but “digital silver” has only partially caught on for Ethereum. Suggestions ranging from “digital oil” to “world computer” are circulating to succinctly describe the multifunctionality of the decentralized Ethereum ecosystem with ETH as its foundation.

Ethereum Foundation and ETH inventor Vitalik Buterin are trying to coin “cypherpunk” as a motto – a move that hasn’t exactly gone down well on Wall Street. But even there, people can no longer write off Ethereum as the eternal number two among cryptocurrencies and are increasingly beginning to understand why ETH has different advantages than Bitcoin.

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(Featured image by Az1975 via Pixabay)

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