BlackRock's Ethereum ETF and Wall Street inflows are strengthening investor confidence.BlackRock's Ethereum ETF and Wall Street inflows are strengthening investor confidence.

Institutional Phase of Ethereum Has Started, But Boundaries Remain Fuzzy

Ethereum’s price may have hit a wall at $4,800, but new research reveals that the leading altcoin is currently in a full transition phase, as its financial assets and ultimate market definition are still forming.

Much of this evolution will depend on regulatory clarity, particularly in the United States, where proposed legislation such as the CLARITY Act would classify ETH as Digital Commodities under federal law, potentially accelerating their maturation process.

ETH in Transition

CryptoQuant stated that Ethereum appears to have entered its institutional era in 2025, owing to strong growth in fund holdings and market premiums. Investment funds now collectively hold 6.1 million ETH, which is a sharp departure from previous records. This total is 68.4% higher than the December 2024 peak of 3.62 million ETH. Against the April 2025 low of 3.49 million ETH, holdings have risen nearly 75%.

In parallel, the Fund Market Premium, measured on a two-week average, now stands at 6.44%. This level is striking when compared with historical figures, and comes up to a 2,047% jump from the 0.30% average at the December 2024 peak and a 2,200% increase from the 0.28% recorded in April 2025.

Together, these indicators explain a steady and expanding institutional demand for Ethereum. Beyond the numbers, this trend carries significant psychological weight for the broader market, as investors observe tier-1 vehicles such as BlackRock’s Ethereum ETF steadily adding to their holdings.

CryptoQuant also added that the influence of Wall Street participation cannot be underestimated, given its dual impact of injecting capital while simultaneously strengthening confidence in the asset.

Looking ahead, institutional demand for Ethereum could expand further once staking becomes enabled within Ethereum ETFs, a development expected later this year but not yet implemented. This shift is expected to be a game-changer for the asset.

Ethereum’s Next Catalyst

Ethereum could reach $10,000 this cycle if US regulators approve staking for spot ETH ETFs, according to EMJ Capital founder Eric Jackson. Last month, he argued that the market had already priced in the ETF launch itself, but staking would be the real catalyst.

Approval would allow institutions to earn yields of up to 3.5%, helping them attract significant passive inflows from traditional finance. This move would also tighten ETH supply by locking more tokens in staking contracts, and would amplify Ethereum’s already deflationary post-Merge model. Jackson described this potential transformation as a “structural supply crunch,” which could revalue ETH from “digital oil” to an institutional-grade yield product.

He believes such a setup could push the crypto asset to $10,000 by the end of the current cycle, with a bull case of $15,000 or more if Layer 2 adoption accelerates and ETF inflows surpass expectations ahead of the anticipated staking approval later this year.

The post Institutional Phase of Ethereum Has Started, But Boundaries Remain Fuzzy appeared first on CryptoPotato.

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