Ethereum has gained nearly 45% over the past two weeks, driven by a confluence of regulatory clarity, rising institutional demand, and favorable supply dynamics, according to analysts at Bernstein.
The GENIUS Act, signed into law by the U.S. President, has recognized stablecoins as legal digital cash. This shift has drawn attention back to Ethereum, the primary blockchain supporting stablecoin transactions.
More than 60% of the total USDC supply is hosted on Ethereum. The platform also holds about 33% of the $25 billion real-world asset tokenization market, largely concentrated in tokenized money market funds. The largest of these, BlackRock’s $2.8 billion BUIDL fund, is built on Ethereum.
Ethereum’s role as an investment asset is reinforced by its staking yield, which is currently about 2.9% in ETH terms.
All stablecoin and tokenized asset transactions incur gas fees payable in ETH. These transaction fees form the basis of validator rewards and staking returns.
As activity on the network grows, yield expectations rise, incentivizing more staking. The proportion of ETH staked has increased to nearly 30%, up from 24% in January 2024.
ETH ETFs have also seen a surge in inflows. Year-to-date, ETH ETF inflows total $4.8 billion, compared to $19 billion for Bitcoin ETFs.
However, momentum is shifting. Last week alone, ETH ETFs drew $2.2 billion, nearly matching Bitcoin’s $2.4 billion.
On one trading day, ETH ETF inflows surpassed Bitcoin’s for the first time, with $602 million versus $523 million.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. BlackRock (NYSE:BLK) recently filed to amend its ETHA ETF to include staking yield, potentially offering around 3% if approved.
Institutional accumulation has extended beyond ETFs. Ethereum treasury companies, following the model popularized by MicroStrategy for Bitcoin, have acquired approximately 430,000 ETH so far in July, representing around 0.6% of total ETH supply.
These companies intend to deploy ETH holdings into staking contracts and decentralized finance applications to generate returns.
Ethereum’s supply has remained stable since the 2021 implementation of EIP-1559, which introduced a mechanism to burn a portion of transaction fees.
ETH supply has grown at a compound annual rate of just 0.8% over the past four years, adding a deflationary pressure that supports price appreciation alongside rising demand.
Institutional interest, expanding ETF products, and a steady economic model anchored in transaction-driven yield continue to solidify Ethereum’s role in the evolving digital asset landscape.
