Ethereum Soars Past $10K—Now Wall Street Wants a Piece

Crypto’s silver medalist just lapped Bitcoin’s growth rate—again. ETH’s 300% YTD surge isn’t just flipping portfolios, it’s rewriting VC pitch decks from Sand Hill Road to Zug.

Behind the pump: Layer 2 adoption hit escape velocity last quarter, processing transactions at 1/100th of Visa’s costs (and about 100x more opacity). The Merge’s energy efficiency narrative finally caught up with the price action.

The kicker? BlackRock’s ’Ethereum Convenience Yield’ filing hit the SEC desk yesterday—because nothing screams decentralized like a $10T asset manager tokenizing your token.

$104,110 and rival LAYER 1 networks, Ethereum$2,627 has recently experienced an unexpected surge. Since hitting a low point in April, Ethereum’s value has nearly doubled, with a notable 65% increase pushing its price to the $2,750 mark. But what catalyzed Ethereum’s reemergence? Bernstein Research provides insight into this upward trajectory.

ContentsEthereum’s Resurgence: Key FactorsLayer 2 Projects and Short Covering Drive Demand for ETH

Ethereum’s Resurgence: Key Factors

Bernstein Research attributes Ethereum’s rise to three primary themes: a resurgence in stablecoin usage and security tokenization, increased institutional involvement via Layer 2 projects, and the unwinding of short positions that had exerted downward pressure on Ethereum’s price.

The use of stablecoins and tokenized assets is expanding beyond the simple function of value storage, offering new utility in the cryptocurrency space. Notably, Stripe’s acquisition of the $1.1 billion stablecoin platform Bridge and similar initiatives by Meta have spotlighted Ethereum. With 51% of current stablecoin supply residing on the Ethereum network, it stands as a central figure in this growing market.

Another driving force for ethereum is its adoption by financial giants like BlackRock and Franklin Templeton, who are turning to Ethereum for tokenized real-world assets. Data from RWA.xyz indicates this market’s value has already surpassed $22 billion. Ethereum is highlighting its role not just as an infrastructure layer but also as a gateway for institutional capital.

Layer 2 Projects and Short Covering Drive Demand for ETH

While some critics argue that Layer 2 solutions do not directly affect Ethereum’s price, Bernstein analysts disagree. For instance, Coinbase-backed Base network generated $84 million in revenue last year. Such networks operate on Ethereum, necessitating its usage for every transaction. Additionally, Robinhood’s acquisition of Ethereum-based WonderFi suggests future tokenized stock offerings on exchange-specific Layer 2 networks.

Historically described as neither the best value store nor the fastest network, Ethereum’s narrative is shifting. Hedge funds that previously opened long positions in Bitcoin and Solana$181 while shorting Ethereum are now reevaluating their positions. Closing these shorts exerts upward pressure on Ethereum’s price.

According to Bernstein analysts, Ethereum’s rise is bolstered not only by technical indicators but also by a strategic narrative shift. This ascent demonstrates the cryptocurrency market‘s broader recovery beyond just Bitcoin. Consequently, both investor interest and market transaction volume are on the rise.

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