What’s Behind Ethereum’s Revival?

Ethereum has surged nearly 45% over the past two weeks driven by a mix of regulatory clarity, rising institutional demand, and favorable supply dynamics, according to analysts at Bernstein.

Ethereum has surged nearly 45% over the past two weeks driven by a mix of regulatory clarity, rising institutional demand, and favorable supply dynamics, according to analysts at Bernstein.

The GENIUS Act, recently signed by the U.S. President, recognized stablecoins as legal digital means of payment. This shift has renewed focus on Ethereum — the primary blockchain supporting stablecoin transactions.

Over 60% of the total USDC supply is hosted on Ethereum. The platform also accounts for around 33% of the $25 billion real-world asset tokenization market, primarily in tokenized money market funds. The largest of these, BlackRock’s $2.8 billion BUIDL fund, is built on Ethereum.

Ethereum’s role as an investment asset is supported by staking yields, currently around 2.9% in ETH terms.

All transactions involving stablecoins and tokenized assets require gas fees paid in ETH. These fees form the foundation of validator rewards and staking returns.

As network activity increases, so do yield expectations, which is encouraging higher levels of ETH staking. The share of ETH staked has risen to nearly 30%, up from 24% in January 2024.

ETH ETFs are also seeing rising inflows. Year-to-date, ETH ETFs have attracted $4.8 billion, compared to $19 billion for Bitcoin ETFs.

However, the momentum is shifting: just last week, ETH ETFs drew $2.2 billion, nearly matching Bitcoin ETFs’ $2.4 billion.

On one trading day, ETH ETF inflows surpassed Bitcoin for the first time, recording $602 million vs. $523 million.

BlackRock (NYSE: BLK) recently filed to amend its ETHA ETF to include staking yield, potentially offering around 3%, pending regulatory approval.

Institutional accumulation has extended beyond ETFs. Companies forming Ethereum treasury reserves — following the model made popular by MicroStrategy with Bitcoin — have acquired approximately 430,000 ETH in July alone, representing roughly 0.6% of ETH’s total supply.

These companies plan to deploy their ETH in staking contracts and DeFi applications to earn yield.

Ethereum’s supply has remained stable since the 2021 introduction of EIP-1559, which implemented a burn mechanism for a portion of transaction fees.

ETH supply has grown at an annualized rate of just 0.8% over the past four years, creating deflationary pressure that supports price growth amid rising demand.

Institutional interest, the expansion of ETF products, and a resilient yield-driven economic model continue to strengthen Ethereum’s role in the evolving digital asset ecosystem.

Editor: Pereyidenko Ihor

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