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Author: Ye Zhen, Wall Street News
The crazy coin hoarding of corporate Ethereum treasury companies forms a synergy with record-breaking ETF capital inflows, jointly pushing the world’s second largest cryptocurrency to a new height.
Ethereum (ETH) price once exceeded $4,500 on Tuesday, hitting a new year-on-year high, with an intraday increase of about 4.85%.According to The Block data, Ethereum has risen by about 40% this year, and its annual price performance has tied with Bitcoin.
The most direct catalyst that drove Tuesday’s rise came from Bitmine Immersion Technologies, the largest “Ethereum Treasury company” in the market.The company announced Tuesday that it plans to issue additional shares worth up to $20 billion through its “at-the-market” equity plan to raise funds for buying more Ethereum.
At the same time, the inflow of capital from spot Ethereum ETFs is also accelerating simultaneously.These products, which have only started trading in July 2024, have increased their market value by about $5 billion in the past month alone and have recorded a single-day net inflow of more than $1 billion for the first time this Monday, showing a strong market demand shock.
The ambition of “first treasury”
Bitmine Immersion Technologies (BMNR) is becoming an increasingly powerful force in the Ethereum market.
The company positioned itself as an “Ethereum Treasury” and its business model follows MicroStrategy, which has been a hugely successful Bitcoin space, raises funds through issuing stocks and uses the proceeds to buy and hold cryptocurrencies on a large scale.
According to the latest data, Bitmine currently holds 1.15 million Ethereum, worth about US$5 billion at current prices, accounting for about 1% of Ethereum’s total circulation.The company is led by investor Tom Lee, whose public goal is to ultimately hold 5% of the global Ethereum circulation supply.
“We are ahead of our peers in terms of speed in improving the crypto net asset value per share or in the high trading liquidity of stocks,” Tom Lee said in a press release.
This plan to increase holdings greatly boosted market sentiment.After the news was announced, Bitmine’s stock price rose more than 5% on Tuesday, with its year-on-year increase of more than 750%.
The competition for enterprises to increase their holdings in Ethereum has also entered a white-hot stage.
Previous reports that Minneapolis-based SharpLink Gaming recently announced that it has raised $400 million from five global institutional investors through a registered direct issuance, aiming to push its Ethereum treasury value to more than $3 billion.According to public data, SharpLink currently holds about 280,706 Ethereum, worth slightly more than $1 billion.
Joseph Lubin, chairman of SharpLink, recently described this as a “brutal leading battle” on social platform X and declared it high-profilely “Game on”, adding more drama to this battle for wealth.
ETF demand surges
In addition to the active layout of corporate treasury, demand from spot ETFs is another major engine driving Ethereum prices.Since its approval for listing in July 2024, the total net inflow of spot Ethereum ETFs has reached US$9.4 billion, with more than half (about US$5 billion) coming from the past 30 days.
On Monday, these ETF products set a historic milestone, with net inflows exceeding the $1 billion mark for the first time in a single day.This series of data shows that Ethereum, as an investable asset category, is rapidly gaining recognition and allocation from traditional financial investors.This continuous and strong capital inflow provides solid support for Ethereum’s market price.
The dual buying of corporate treasury and ETF funds is having a significant impact on the supply and demand relationship of Ethereum.
Matt Hougan, chief investment officer of Bitwise, described the phenomenon as a “demand shock.”According to his estimate, since May this year, the amount of Ethereum purchased by funds and enterprises is 32 times the new supply found on the Internet during the same period.Hougan predicts that under this supply-strength pattern, Ethereum prices may continue to rise.
The development of the treasury company has just begun
Geoffrey Kendrick of Standard Chartered Bank pointed out in a report that the development of Ethereum treasury companies “just just started” and that over time, these companies’ holdings may grow tenfold, eventually reaching 10% of Ethereum’s total supply.
The rise of Ethereum treasury strategy is not an isolated case.In addition to the leading Bitmine, cryptocurrency broker Coinbase (COIN) also holds more than 100,000 Ethereum worth more than $500 million on its balance sheet.
Other companies, including SharpLink Gaming (SBET), are also reportedly adopting similar strategies.This trend even extends to the Bitcoin space, such as GameStop (GME) announced in March this year that it plans to include Bitcoin on its balance sheet.
In addition, the fundamentals of the Ethereum ecosystem also support its value.According to Coindesk, the successful IPO of fintech giant Circle in June, and the recognized status of the Ethereum network as the preferred ecosystem for most stablecoin issuances have enhanced its long-term value as a key blockchain infrastructure.These factors work together to reshape investors’ perception and valuation models of Ethereum.
