Ethereum Eclipses Bitcoin in Holder Activity Amid Predicted ETF Boom

Ethereum (ETH) has emerged as a frontrunner in recent weeks, overshadowing Bitcoin in holder activity and speculative fervor amidst anticipation of an Ethereum Exchange-Traded Fund (ETF) trading debut. This comes even as Bitcoin’s price grapples to recover amidst immense selling pressure from miners this month.

On Sunday, crypto analytics platform Intotheblock highlighted a notable shift in strategy among large Ethereum holders, particularly miners, who have adopted a cautious “risk-off” approach. This starkly contrasts Bitcoin holders, who began profit-taking earlier this year.

“The behavior of long-term holders is pivotal in understanding the market cycle,” the firm wrote. “Ethereum’s holders continue to accumulate, driven by attractive yield opportunities and anticipation of ETF-related price movements.”

As per the firm, a significant factor contributing to Ethereum’s momentum is the emergence of lucrative yield opportunities within its ecosystem. Currently, 27.5% of the total ETH supply is staked, with a substantial portion being re-staked through protocols like Eigenlayer, highlighting a strong demand for native yield among ETH holders.

This comes alongside recent data shared by crypto analyst Ali Martinez, illustrating that Ethereum whales have acquired over 700,000 ETH in the past three weeks, totaling approximately $2.45 billion. Additionally, on Friday, the pundit highlighted a notable surge in active ETH addresses, reaching 617,170, marking the highest level in three months.

Notably, the potential approval of an Ethereum ETF has been a focal point in driving market sentiment. On Friday, major financial players, including BlackRock, VanEck, and Grayscale Investments, filed applications for the products to the U.S. Securities and Exchange Commission (SEC), underscoring this optimism. Notably, the latest filings showed that issuers lowered the fees for their products considerably, which could make ETH ETFs more attractive to investors compared to BTC.

On June 13 SEC Chairman Gary Gensler indicated a favorable outlook, expecting bureaucratic procedures to conclude soon, paving the way for Ethereum ETF trading next month. This regulatory progress follows the SEC’s closure of an investigation into Ethereum earlier this week, aimed at providing greater clarity and confidence for institutional investors.

That said, market analysts have echoed bullish sentiments, predicting significant upside potential for Ethereum leading up to and following the ETF launch.

“ETH is getting closer for a massive breakout… In my opinion, a new all-time high for ETH will happen in Q3,” tweeted analyst EljaBoom, projecting his target at around $5,200 based on a potential bull flag.

Despite bullish forecasts from analysts predicting substantial upside potential for Ethereum, not all experts share the same optimism regarding the impact of an ETH ETF on its price trajectory.

Andrew Kang, co-founder of Mechanism Capital, noted that the impact of an ETH ETF may not be as straightforward as that of Bitcoin. In a lengthy post on Sunday, the pundit emphasized that Ethereum needs a clear path to enhance its economic fundamentals to see significant price appreciation.

“I was vocally bullish for Bitcoin at $25k when the Blackrock ETF application was submitted and now since then, it has returned 2.6x, with ETH returning 2.1x. From the cycle bottom, BTC has returned 4.0x and ETH has returned a similar 4.0x. So how much upside would an ETH ETF Provide? I would argue not much unless Ethereum develops a compelling pathway to improve its economics, “wrote Kang.