With the continued inflow of institutional funds and the gradual recovery of market sentiment, Ethereum (ETH) is showing strong long-term potential.
Although Ethereum’s price failed to break through the key $4,000 resistance level in 2024, BlackRock’s iShares Ethereum Trust ETF’s holdings have quietly exceeded one million ETH, marking the growing confidence of institutional investors in this smart contract platform.
Strong influx of institutional funds
At the beginning of 2024, the price of Ethereum was around $2,280 and has risen 43% so far, jumping to $3,283.
While this increase is notable, it still appears relatively conservative compared to the performance of other cryptocurrencies like XRP and Solana (SOL).
However, the uniqueness of ETH lies in its provision of a direct investment channel for institutional investors through regulated ETFs.
Similar to the market position of Bitcoin (BTC), Ethereum is gradually becoming the preferred choice for institutional investors.
Cryptocurrency entrepreneur Dan Gambardello revealed on social media platform X (formerly Twitter) that BlackRock's iShares Ethereum Trust ETF has held over one million ETH.
This data reflects that institutional demand for Ethereum is accelerating, especially after a prolonged market consolidation, as the market gradually recognizes ETH's potential.
Institutional Demand Drives ETH's Outlook
Unlike most altcoins, ETH has a significant advantage in being able to directly attract institutional investor capital through regulated investment tools like ETFs.
This trend is crucial not only for Ethereum's long-term prospects but may also lay the foundation for future market conditions.
According to a report from the crypto data platform SoSoValue, US spot ETH ETFs have seen net inflows for four consecutive weeks this year, attracting over $2 billion in total.
This capital inflow has further expanded Ethereum's market value. The total net assets of existing US spot ETH ETFs have reached $12.15 billion, accounting for nearly 3% of Ethereum's total market capitalization.
The influx of institutional capital reflects the market's high recognition of Ethereum as a leading smart contract platform.
Moreover, ETH's technical aspects also show some positive signals.
Cryptocurrency analyst @CryptoPoseidonn pointed out in his latest analysis that ETH may currently be bottoming out near the 200-day exponential moving average (EMA), providing investors with an opportunity to re-enter the market.
He stated, "This is the first correction since the last significant surge, panic sentiment has peaked, and I believe this will mark the starting point for us to create higher lows."
This indicates that the current market correction may just be a prelude to higher gains.
Market Adjustment: Opportunity or Challenge?
Although ETH's performance at the beginning of 2024 has not been as strong as some other cryptocurrencies, the overall cryptocurrency market has recently undergone a wave of adjustments.
According to Coinglass data, since December 16, the total market capitalization of cryptocurrency has decreased from $3.9 trillion to the current $3.4 trillion, with a loss of $500 billion in a single week.
In the past 24 hours, the total liquidation amount in the market has exceeded $289 million. This market adjustment has left investors filled with doubts about future trends.
However, some experienced analysts remain optimistic about the market outlook. Cryptocurrency analyst Pentoshi stated that the current market crash might be a retest of the historical peak (ATH) of cryptocurrency market capitalization reached in November 2022.
If this assumption holds, the market may find support at this level, becoming the starting point for the next upswing.
Pentoshi also added, "If the institutional demand for Ethereum continues to grow, the market will enter a healthier upward cycle."
External Factors: Market Outlook After the US Election
In addition to the continued inflow of institutional funds, the market is also facing some external factors.
Based on historical data, the year following a US presidential election often sees an upward trend in the cryptocurrency market.
For example, following the 2016 US election, Ethereum experienced a significant surge in the first quarter of 2017; a similar rising pattern occurred in the first half of 2021 after the 2020 election.
Cryptocurrency analyst CryptosRus pointed out that historically, the market trend after the 2024 US election could once again provide Ethereum with upward opportunities.
Nevertheless, some analysts hold a cautious view on the short-term market outlook.
Notable cryptocurrency entrepreneur Arthur Hayes recently warned that the period around Trump's inauguration in January could lead to a short-term market lull.
However, Hayes also acknowledged that the volatility of the cryptocurrency market is inherently high, and the continued influx of institutional capital may support ETH's future rise.
Conclusion:
Although ETH's short-term performance in 2024 is relatively subdued, its strong infrastructure and continuously growing institutional demand provide solid support for its future rise.
BlackRock's Ethereum ETF surpassing the milestone of one million ETH demonstrates the high attention institutional investors are paying to ETH, and this trend could drive ETH into the next upswing.
The market adjustment may offer investors an opportunity to buy at a low point, while the dual support of technical aspects and institutional capital inflow injects strong momentum into Ethereum's future development.
From both the inflow of institutional capital and the perspective of technical analysis, Ethereum is gearing up for the next bull market.
In the world of cryptocurrency, ETH remains an important asset that investors should pay attention to, and its future potential should not be underestimated.