Ether Hits 4-Year High with New Opportunities for Institutional Investors Set to Emerge

The native token of the Ethereum blockchain peaked at about $4,350 in the early hours of Monday morning (UTC), the highest price since December 2021, and was trading at 4,277.32 at 09:04 UTC. The asset surged 22% in the previous week, compared with a 7.4% increase in the entire dollar value of the crypto market.

Crypto enthusiasm revival

While Ether is likely benefiting from enthusiasm for crypto assets across the board in recent days, it has also been buoyed interest in ETFs that have attracted billions of dollars to the token and expectations of a more flexible regulatory approach to these investment products in the US. Amid a high volume of network transactions, investors are studying the different ways to benefit from exposure to the second-largest cryptocurrency, even with Bitcoin (BTC) also enjoying a revival of interest.

Corporate treasuries

Companies with corporate treasuries invested in crypto have been flocking to Ether, with the market swelling to $13 billion worth of ETH holdings, according to figures from tracking site strategicethreserve.xyz. So-called Ether treasury firms are helping to narrow the gap on Bitcoin which has significantly outperformed the price of Ether in the bull market since November and has been the first choice for corporate investments in crypto.

Companies such as Bit Digital, BitMine Immersion, and SharpLink Gaming have all announced plans to boost Ether ownership in recent months, while the newly created “The Ether Machine” is also fueling demand.

ETF inflows

Investors piled into ETFs last week with four straight days of net inflows accumulating almost $208 million additional volume by the end of Friday, according to Coinglass data.

Meanwhile, the US Securities and Exchange Commission (SEC) has been taking further steps to enable the development of these investment vehicles which first appeared for Ether last year. The SEC said late July it has approved a new system for “in-kind creations and redemptions” for various crypto exchange-traded products (ETPs). 

With this latest new rule, large financial institutions called authorized participants – usually big banks, brokers, or specialist trading firms – can now deliver or receive the actual Bitcoin and Ether directly when creating or redeeming shares, as has long been the case for European crypto ETPs. This also brings potential tax benefits for some investors and reduces friction for larger institutions that trade in these products.

Staking securities exemption

The SEC said on 5 August it may exempt liquid staking from securities regulation – an announcement that may have further encouraged Ether buying last week. That initiative does not, however, seem to have unanimous support at the SEC. At least one commissioner, Caroline Crenshaw, has expressed doubts about the content of the communication by the SEC’s Division of Corporation Finance.