CryptoQuant: US Institutional Demand Led to ETH Price Surge

ETF Ethereum United States

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David Pokima

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David Pokima

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David is a finance journalist and a contributor to Cryptonews.com with a keen interest in breaking comprehensive, accurate, and reliable blockchain news.

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February 26, 2024

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United States investors’ activity has spurred growth in the cryptocurrency market leading to ETH price hikes in recent weeks, especially as anticipation of spot Ethereum ETF approvals builds up.

A new market analysis from on-chain analytics firm CryptoQuant shows United States bulls are largely responsible for the increase in the price of Ethereum (ETH).

According to the firm, Coinbase Premium data reveals a surging demand from the US, causing an 11% growth for the asset. Interest in ETH tokens on Coinbase Premium was higher than usual, as the indicator showed a gap in ETH/USD and ETH/USDT on Coinbase and Binance.

Ho Chann Chung CryptoQuant’s Head of Marketing explained this growth shown by pointing to future gains in the coming weeks.

“The recent ETH price action was driven by the US demand. We can see that the Coinbase has triggered the upward movement with the premium index.”

Anticipation For Spot Ethereum ETF

A major reason for increased demand by United States investors is the anticipation for a spot Ethereum ETF approval by the United States Securities and Exchange Commission (SEC).

Institutional investors hope an approval would create a new investment window into the asset on the back of the recent bull cycle. In recent weeks, several firms have backed Ethereum’s growth, describing ETH as an investor favorite.

As firms eye a spot ETH ETF, significant institutional inflows have been recorded in the assets products in recent weeks. In the last seven days, $16.8 million flowed into institutional funds, raising the monthly inflow to $54.4 million.

Furthermore, Ethereum’s Assets Under Management (AUM) stands at $12.5 billion, with inflows wiping out losses recorded last year.

Last year, Solana (SOL) recorded consecutive weekly gains, earning the title of institutional investor favorite while Ethereum posted mild outflows. However, with the recent ETH price action, this might not be the case for long.

At press time, Ethereum trades at $3,250, an 11% gain in the last seven days and a whopping 40% in the last month. The asset’s market capitalization topped $389 billion as its daily volumes surged above 50% to $22.7 million.

Several institutions have filed for a spot Ethereum  ETF including Franklin Templeton,  Fidelity Investments, VanEck, Grayscale, Hashdex, etc.

ETH Price Draws Motivation from Bitcoin

Spot Bitcoin ETFs were approved in the United States on January 10, leading to a spike in Bitcoin price and inflow into institutional funds.

So far, over $5.2 billion has flowed into institutional products with projections for further growth. Bitcoin trades at $57,100, posting over 35% in gains in the last month as bulls look toward breaching new levels not seen since 2021.

The inflows into the market leader caused a rebound in the broader market. The total cryptocurrency market cap stands at $2.15 trillion, with institutional fund AUM at $67.4 billion.

This growth has led to a renewed interest in decentralized finance (DeFi) activities as well as a surge in the total value locked (TVL) across protocols.