Ethereum Rally Boosted by Institutional Demand and L2 Growth
Ethereum rallied over 8% in 24 hours to around $3,470, driven by renewed buying pressure and institutional accumulation. BlackRock added 159,101 ETH, WLFi and SharpLink Gaming also increased holdings, pushing total institutional reserves near 1.6M ETH and exchange balances to 13.4% of supply.
Wall Street views Ethereum as a core reserve asset for the on-chain dollar economy. Electric Capital data shows Ethereum hosts over 54% of the $200B stablecoin market and backs $19B in DeFi loans. Yield-bearing stablecoins topping $4B are fuelling demand for ETH collateral.
A Fidelity report frames Ethereum as a sovereign digital economy: ETH serves as base money and store of value, with daily active wallets above 2.5M and transaction counts near 19M. Analysts liken ETH to “digital oil,” underlining its role in transaction fees and collateral for tokenized real-world assets.
Ethereum’s fee revenue has fallen from $82M at its 2021 peak to $3M today, reflecting a shift toward Layer-2 scaling. As L2 throughput rises, institutional adoption momentum strengthens, positioning Ethereum for further upside. ETH traded up 23% last week, still below its $4,855 all-time high.
Bullish
Strong institutional accumulation by BlackRock and others, coupled with Ethereum’s dominant role in the stablecoin market and DeFi, points to robust demand that can drive prices higher in the short term. The declining fee revenue and increasing Layer-2 adoption suggest lower transaction costs and higher network throughput, attracting more users and institutions over the long term. Historical analogies to the 2017 cycle and rising on-chain indicators such as low exchange balances and growing staking market cap further support a bullish outlook for ETH.