New Drivers of Ethereum Growth Identified by Bernstein

Analysts at Bernstein have identified two key factors that contributed to a 55% increase in Ethereum’s price over the past month: record inflows into spot ETFs and the emergence of a new class of investors, as reported by The Block.

Companies are beginning to build corporate reserves in the second-largest cryptocurrency by market capitalization to earn returns through staking.

Bernstein estimates that firms such as SharpLink Gaming, BitMine Immersion, Bit Digital, and BTCS acquired around 876,000 ETH in July, with their collective stake reaching 0.9% of the total supply. They are raising capital from public markets and private investors.

Corporate holders of Ethereum can receive staking yields, currently around 3% annually. This is a significant difference when compared to Bitcoin reserves, where transaction fees go to miners instead of coin holders. Analysts believe that a $1 billion Ethereum treasury could generate between $30 million and $50 million in annual income.

Unlike liquid Bitcoin reserves, ETH treasuries face delays in withdrawing coins from staking, which can take several days.

Bernstein cautioned that companies must also recognize the risks associated with smart contracts in DeFi and when utilizing restaking through platforms like EigenLayer. The success of these firms relies on conservative balance and risk management.

Corporate purchases are occurring amid the rise of spot ETH ETFs. Since the beginning of the year, inflows into these ETFs have totaled $6.7 billion, with assets under management reaching $20.7 billion.

Analysts noted that firms view Ethereum as a strategic asset due to its importance in the stablecoin and real-world asset tokenization sectors. Over 50% of the supply of dollar-pegged stablecoins circulates within the Ethereum network.

Bernstein believes that these factors, along with the transaction fee burning mechanism, could contribute to the asset’s value growth as network utilization increases.

Shares of BitMine (BMNR) fell nearly 27% despite announcing plans to accumulate Ethereum. Fundstrat representative Tom Lee’s remarks failed to convince shareholders.

In a recent presentation, the company launched a monthly series called «The Chairman’s Message» to discuss its crypto strategy. Lee revealed the intent to hold and stake 5% of the total Ethereum supply. On one slide, the company forecasted ETH’s price could reach $60,000, citing unnamed research firms.

However, the market reacted negatively. BMNR dropped by 11% during the trading session and an additional 15% in post-market trading.

This contrasts with a recent surge; following the announcement of Ethereum purchases, shares skyrocketed over 3000%, peaking at $135 for the year.

During his presentation, Lee confirmed that BitMine holds 600,000 ETH worth more than $2.2 billion. He stated the company aims to become an «American network of validators» with all operations based in the U.S., emphasizing a desire to participate in the Ethereum community to strengthen the ecosystem.

SharpLink’s Chairman Joseph Lubin expressed the company’s commitment to rapidly build reserves in Ethereum, believing that they can accumulate ETH shares faster than any competitor.

Lubin noted that SharpLink purchases cryptocurrency daily through market placements while also staking existing assets for additional income.

He highlighted that SharpLink takes a conservative approach to risks, avoiding leverage but considering the issuance of convertible bonds—similar to a method used by Strategy to enhance its Bitcoin reserves.

Currently, BitMine leads the treasury race with 566,800 ETH, while SharpLink holds the second position with 360,800 ETH.

This trend is viewed as a significant driver of demand for cryptocurrency, contributing to its price growth. In the past month, Ethereum’s price has risen by 56.9%, according to CoinGecko.

Analyst Wilson Ye described the current situation as «institutional FOMO,» suggesting that major players are rushing to occupy dominant positions ahead of potential spot ETF approvals, which could further amplify demand.

The race for institutional ETH accumulation is intensifying. BitMine has just surpassed a major milestone, exceeding 560,000 tokens valued at over $2 billion, breaking their previous tie with SharpLink and establishing themselves as a serious contender.

It’s worth noting that Santiment experts have indicated a concerning signal for Ethereum—a surge in social media mentions of the cryptocurrency. This indicator has reached a level of «extreme euphoria,» signaling potential risks of a correction.