Ethereum Bull Run Begins: Institutional Funds as the Biggest Driver

The popularity of Ethereum continues to heat up, with multiple indicators showing that a real bull run may be on the horizon. Recent data indicates that institutional demand may become a key driving force behind this rally.

Stablecoin Demand Soars

By the end of the second quarter, the supply of stablecoins on the Ethereum network had reached approximately $140 billion, accounting for the majority of the stablecoin market share. With the Genius Bill expected to pass, a rapid increase in stablecoin supply is anticipated in the future. Many fintech companies and banks are actively laying out stablecoin business, which will have a profound impact on e-commerce payments and global financial inclusion.

Ethereum chain activity rebounds

Compared to the same period last year, active loans on the Ethereum network have increased by 98%. This reflects a growing confidence in the market towards Ethereum, with users showing an increasing interest in accessing DeFi. Institutional investors are actively deploying ETH as a productive asset into the Ethereum ecosystem, which may lead to a "late-stage prosperity effect" in the DeFi market.

Accelerating Real-World Assets onto the Blockchain

The annual growth rate of real-world assets on Ethereum has reached 205%, with a total scale of 7.5 billion USD. The future of stablecoins and stocks being on-chain is expected to become a major growth driver. This will further promote the development of DeFi, enhance capital efficiency, and create a virtuous cycle.

Institutional funds continue to flow in

Since its establishment, the net inflow of the Ethereum ETF has reached 5.7 billion USD, approximately 20% of the inflow scale of the Bitcoin ETF. Currently, the total amount of ETH held by the ETF has reached 4.6 million coins, equivalent to about 13 billion USD. The ETH holdings in public treasuries have also seen significant growth, with some institutions even starting to shift from Bitcoin to Ethereum.

Supply Dynamics Improvement

Despite the decline in on-chain activity in the second quarter, the supply growth rate of Ethereum remains lower than that of Bitcoin, at only 0.18%. Approximately 43% of ETH supply is locked in smart contracts, while the ETH balance on centralized exchanges is at its lowest level in nearly 8 years. This reflects an increased confidence among users in holding ETH for the long term.

Valuation is still within a reasonable range

Currently, the MVRV Z-score is 0.8, below the five-year average of 1.04, indicating that the current price is still within a reasonable range based on historical standards. Indicators such as the 200-week moving average also show that ETH prices still have considerable room for growth.

Outlook

With institutional funds continuing to flow in and the Layer 2 ecosystem thriving, Ethereum is expected to further consolidate its network effects. Although short-term gains have declined, in the long run, Ethereum is in a period of adjustment for product-market fit and pricing strategy, and its future development prospects remain bright.