Ethereum Surges 17% as Institutions Accumulate $1.6 Billion in ETH

Ethereum investors have been actively accumulating ETH, with corporate treasury companies scooping up at least $1.6 billion worth of Ether in the past month. This surge in institutional buying has coincided with a significant rally in Ether's price.

Corporate treasury companies have accumulated more than 545,000 ETH over the past 30 days, according to recent purchase announcements. BitMine Immersion Technologies, chaired by Fundstrat’s Tom Lee, announced that its total Ether holdings were 163,142 ETH, worth around $480 million at current market value. Lee compared this accumulation to Michael Saylor’s aggressive Bitcoin strategy, suggesting that Ethereum could benefit from a similar 'Wall Street put' if it accumulates 5% of the ETH supply.

Joseph Lubin’s gaming platform, SharpLink, has been particularly active in accumulating ETH. On July 11, it acquired 10,000 ETH, followed by 16,370 ETH on July 13, and an additional 24,371 ETH on Monday, bringing its total holdings to over 255,000 ETH. This makes SharpLink the largest corporate Ethereum treasury. Lubin has referred to himself as a “self-appointed representative of The League of Extraordinary ETH Accumulator Gentlemen,” acknowledging the efforts of other companies in accumulating ETH.

Other companies that have recently acquired Ethereum for their corporate treasuries include digital asset platform Bit Digital, with more than 100,000 ETH, and Blockchain Technology Consensus Solutions (BTCS), which raised $62.4 million to expand its ETH holdings to 29,122 ETH this month. GameSquare also announced a strategic plan for a $100 million Ethereum treasury on July 8.

Ethereum-based digital investment funds have posted their 12th consecutive week of inflows, totaling $990 million, the fourth largest weekly inflow on record. This influx indicates a strong bullish sentiment among investors, with Ethereum products seeing more than $4 billion in inflows so far this year. Almost 30% of that has come in the last two weeks as institutions pile into the asset.

In relative terms, Ethereum’s inflows over the past 12 weeks account for 19.5% of the total assets under management for all global Ether funds, compared to 9.8% for Bitcoin funds. The price of Ethereum (ETH) topped $3,000 for the first time since February on July 11, but has since pulled back below it with a 17% gain on the week.

Hedge funds have been actively shorting ETH during its recent price surge to $3,000, employing a basis trade strategy that involves shorting the asset on one platform while simultaneously buying it on another. This strategy allows traders to remain delta neutral in terms of price action and secure an annual yield of around 9.5% by shorting ETH on the CME while buying spot ETFs.

The trend of inflows into ETH ETFs has been ongoing since early May, with a record $421 million in inflows on a single Thursday. The basis trade strategy has been popular among traders, particularly with Bitcoin (BTC) in 2024. However, the yield from this strategy collapsed in March, temporarily stalling inflows and muting price action. Despite this, the strategy remains attractive for ETH, as traders can secure an additional yield of 3.5% per year by staking the spot ETH they purchase.

The Ethereum Foundation recently sold 1,206.7 ETH for $3.61 million, amid market scrutiny. This sale did not impact the overall market sentiment, as the government's Ethereum holdings remain stable at 656 ETH, worth about $1.93 million. The quantity of ETH held by the government has not changed in the past week, despite an 18% boost in value.

Institutional investors, led by U.S. spot Ether ETFs, have been aggressively accumulating more coins. This accumulation has contributed to the overall bullish sentiment surrounding ETH, with investors piling into cryptocurrencies in response to favorable macroeconomic and political conditions. The dominance of Ethereum in the decentralized finance (DeFi) sector has been cemented, with smart investors not only holding ETH but also maximizing its utility. This trend is expected to continue, with Ethereum's potential for growth making it a compelling call for aggressive investors.