Ethereum welcomes a capital reshuffle! ETH price rebounds significantly, institutional reserves race becomes a new turning point.

Author: Nancy, PANews

In recent days, as the price of ETH continues to rise, the arms race for Ethereum reserves has intensified, and market confidence has significantly improved. This rebound is largely attributed to the active influx of institutional funds. However, with more institutional participants accelerating their entry, Ethereum may face a capital upheaval.

Wall Street enters the game with ETFs, and the narrative of publicly listed companies brings a new inflection point.

The launch of the Ethereum spot ETF was seen as an important milestone towards Wall Street and traditional finance, with the market generally expecting it to significantly boost the price and ecosystem of Ethereum.

However, since the launch of the Ethereum spot ETF in July 2024, the market has not seen the anticipated spark. The price trend of ETH has been weak, and the ETH/BTC exchange rate continues to decline, leading to a significant impact on investor confidence. Meanwhile, some selling actions by the Ethereum Foundation have also sparked market controversy. Although these sell-offs may be driven by operational needs, the sensitivity of market sentiment has amplified the interpretation of these actions, and the voices pessimistic about Ethereum are growing louder.

According to SoSoValue data, since the launch of the Ethereum spot ETF (on July 23, 2024), the total net inflow of funds has been approximately $5.76 billion, accounting for 3.87% of Ethereum's total market capitalization. From the perspective of fund flow dynamics, there have only been three months of net outflows in the past 13 months, with a total outflow amount of $930 million, indicating a stable trend of fund absorption overall.

However, the steady inflow of ETF funds has formed effective support at the ETH price level. According to CoinGecko data, from the launch of the ETF to the announcement by the first ETH reserve company, SharpLink Gaming, to establish a strategic Ethereum reserve (May 27, 2025), the maximum increase in ETH price was only 16.55%, while the maximum decrease reached as high as 63.34%. In contrast, since the launch of the Bitcoin spot ETF on January 11, 2024, the BTC price has increased by as much as 153.3%, showing a much stronger market performance. The market performance of Ethereum and Bitcoin under the support of ETFs forms a sharp contrast.

It was only in the last two months that the market sentiment began to gradually shift. On one hand, ETH experienced a technical rebound after a deep adjustment; on the other hand, the Ethereum Foundation initiated reforms to its internal governance mechanisms, along with listed companies starting to include ETH on their balance sheets, injecting new narrative momentum into ETH.

Since companies like SharpLink Gaming, Siebert Financial, and Bit Digital have announced their allocation to ETH, the price of ETH has recorded a cumulative increase of 22.29% (data as of July 16), significantly outperforming Bitcoin's 7.9% during the same period. This rebound is not only built on the basis of asset revaluation but is also benefiting from the gradual formation of a new narrative around strategic reserve assets.

The current market sentiment is bullish, for example, ARK Invest founder Cathie Wood recently publicly stated that the long-term value of Ethereum is severely underestimated; Varys venture capital director is betting with Multicoin co-founder on whether ETH can reach $10,000 by the end of 2026. At the same time, institutions are accelerating their entry, with Ethereum spot ETFs recording over $1 billion in net inflows for two consecutive months. Bitwise Chief Investment Officer Matt Hougan even stated that the inflow of Ethereum ETFs could significantly accelerate in the second half of 2025.

Institutional holdings exceed 1.6 million ETH, Ethereum is set to face a capital shift.

After traditional financial giants such as BlackRock, Fidelity, and ARK have entered the spot ETF arena, and the publicly listed company Strategy has sparked a wave of Bitcoin reserves, the narrative and pricing power of Bitcoin have shifted from the crypto-native community to Wall Street capital.

Nowadays, this trend seems to be gradually replaying on Ethereum, with more and more listed companies making large-scale capital arrangements around Ethereum. According to data from Strategic ETH Reserve, there are 54 entities holding more than 100 ETH, collectively holding over 1.6 million ETH, valued at over $5.07 billion, which accounts for 35% of the total size of the ETH ETF. In the past two months, listed companies such as SharpLink Gaming, BitMine, Bit Digital, BTCS, GameSquare, and Bit Digital have announced their intention to include ETH in their company balance sheets.

From the current stage of institutional involvement in Ethereum, there are mainly two camps. One camp is represented by SharpLink, backed by Ethereum supporters such as ConsenSys, Galaxy Digital, Pantera Capital, and Electric Capital, which is seen as a collective self-rescue effort of the early native forces in the Ethereum ecosystem. As of now, SharpLink has accumulated over 280,000 ETH, surpassing the Ethereum Foundation's holding of 242,500 ETH, becoming the largest institutional holder of ETH in the world.

The other faction is represented by BitMine, which adopts a Wall Street approach by replicating the reserve logic of Bitcoin through strategies and incorporating ETH into its financial statements while leveraging purchases. This institution is backed by Wall Street’s “whiz kid” and Ethereum bull Tom Lee, and while maintaining its Bitcoin mining operations, it has included ETH in its balance sheet, currently holding over 160,000 coins, ranking among the top five globally.

If the holdings of these institutions continue to expand, the pricing power, discourse power, and even governance power that were originally in the hands of developers, core researchers, the Ethereum Foundation, and early OG investors may face a reshuffle. However, looking at the listed companies currently holding ETH, most are generally facing financial pressure, aiming to hedge against inflation, boost stock prices, or seek short-term excess returns, especially with the successful case of Strategy, they have yet to show a willingness to be deeply tied to the construction of the Ethereum ecosystem. At the same time, these institutions find it difficult to compete with leading institutions in terms of allocation scale, risk tolerance, and holding periods, which limits their substantial influence on the governance and long-term development of the Ethereum ecosystem. In other words, the real players who can dominate the future direction of the Ethereum ecosystem are still those top participants with strong financial strength.

Moreover, unlike Bitcoin which has soul evangelists like Michael Saylor (Strategy CEO) during the wave of Bitcoin reserves, Ethereum has yet to see a figure who possesses both faith-based attributes and traditional capital influence. Whether Tom Lee can take on a role similar to Saylor remains to be seen. This somewhat limits Ethereum's overall dissemination as an institutional asset in mainstream capital markets.

Of course, Ethereum's official stance towards institutional arrangements is open. Ethereum founder Vitalik Buterin recently stated that institutions choose Ethereum because it is stable, secure, does not experience downtime, and has a clear technical roadmap; the new co-executive director of the Ethereum Foundation, Tomasz Stańczak, also pointed out that the reason institutions favor ETH is due to its "ten years of uninterrupted operation, continuous upgrades, and unwavering commitment to censorship resistance and security."

However, Vitalik has recently emphasized the importance of dual governance mechanisms and decentralization. Vitalik pointed out that dual governance provides an additional layer of independent defense that can prevent the system from taking particularly harmful actions, while clearly including Ethereum users as stakeholders, rather than relying solely on informal, "atmosphere"-based alignment. He also stressed that if decentralization only remains at the level of slogans, Ethereum will face a survival crisis.

Overall, with Ethereum igniting a reserve trend, the market's attention and liquidity have undoubtedly seen significant improvement. However, if the price increase lacks strong support from actual ecosystem activity, it will ultimately be nothing more than a castle in the air or an artificial mirage, difficult to sustain. The true core driving the steady growth of ETH value remains the continuous innovation and increased activity within the Ethereum ecosystem, which directly determines the frequency of network usage and value accumulation. Currently, the Ethereum Foundation is focusing on deep reforms across multiple dimensions, including organizational structure, ecological collaboration, and technological evolution, aiming to reshape ecological dominance, strengthen governance effectiveness, and thus reverse the negative perceptions of Ethereum from the outside.