Ethereum Market Welcomes New Changes: Institutional Funds Flow In Triggering a Reserve Arms Race

Recently, the price of Ethereum has been continuously rising, and market confidence has noticeably improved. This rebound is largely due to the active participation of institutional funds. With more institutions accelerating their entry, Ethereum may face a significant change in its capital landscape.

Market Performance After the Launch of Spot ETFs

The Ethereum spot ETF launched in July 2024 did not meet market expectations. The ETH price showed weakness, and the ETH/BTC exchange rate continued to decline, affecting investor confidence. Although ETF funds continued to flow in, they failed to effectively support the ETH price. Data shows that from the launch of the ETF until the end of May 2025, the maximum increase in ETH price was only 16.55%, while the maximum decrease reached 63.34%. In contrast, after the launch of the Bitcoin spot ETF, the BTC price increased by 153.3%, highlighting a stark difference.

However, the market sentiment has begun to shift in the past two months. After a deep adjustment, ETH has seen a technical rebound, coupled with the Ethereum Foundation initiating internal governance reforms and publicly listed companies starting to include ETH on their balance sheets, injecting new momentum into ETH. Since some publicly listed companies announced their allocation of ETH, the price of ETH has recorded a cumulative increase of 22.29%, significantly outperforming Bitcoin's 7.9% during the same period.

Institutions Accelerate Layout on Ethereum

With traditional financial giants entering the spot ETF arena and publicly listed companies launching a Bitcoin reserve trend, this trend seems to be repeating itself with Ethereum. An increasing number of publicly listed companies are making large-scale capital deployments around Ethereum. Data shows that there are already 54 entities holding more than 100 ETH, collectively holding over 1.6 million ETH, worth more than $5.07 billion.

Currently, the institutions entering Ethereum can be divided into two camps: one camp is the early native forces of the Ethereum ecosystem banding together for self-rescue, while the other camp follows the Wall Street strategy that replicates Bitcoin's reserve logic. If these institutions continue to expand their holdings, the pricing power, discourse power, and even governance power of Ethereum may face a reshuffle.

However, most publicly listed companies currently configuring ETH are facing financial pressure, with the main objective being to hedge against inflation, boost stock prices, or seek short-term gains, and they have not yet demonstrated a willingness to deeply bind with the Ethereum ecosystem's construction. At the same time, these institutions find it difficult to compete with leading institutions in terms of allocation scale, risk tolerance, and holding period, which limits their substantive influence on the governance and long-term development of the Ethereum ecosystem.

Ethereum's Official Stance and Future Challenges

The Ethereum official holds an open attitude towards institutional layout. Founder Vitalik Buterin stated that institutions choose Ethereum because it is stable, secure, does not go down, and has a clear technical roadmap. However, Vitalik also emphasized the importance of dual governance mechanisms and decentralization, pointing out that if decentralization remains merely a slogan, Ethereum will face a survival crisis.

Overall, as Ethereum sparks a wave of reserves, market attention and liquidity have significantly increased. However, if the price rise lacks support from actual ecological activity, it is difficult to sustain. The real core driving the stable growth of ETH's value remains the continuous innovation and increased activity within the Ethereum ecosystem. Currently, the Ethereum Foundation is undertaking comprehensive reforms from multiple dimensions, aiming to reshape ecological dominance and strengthen governance effectiveness to reverse the negative perceptions of Ethereum.