- Ether rose above $4,500 for the first time since late 2021.
- Prices increased nearly 40% in August, reaching a high of $4,638.
- Analysts credit renewed institutional interest, ETF inflows, and optimistic market sentiment.
- Ether is currently outperforming Bitcoin in terms of ETF holdings and trading volume.
- Experts point to both a shift in investor sentiment and momentum trading as drivers for the rally.
On August 12, the price of ether surpassed $4,500, marking its highest level in over three years. The digital currency, which is the second largest by market value, peaked at $4,638, per Coinbase data from TradingView.
During the month of August, ether’s value jumped close to 40% after starting the month around $3,375. Multiple analysts attribute the increase to strong demand from institutional investors and high inflows into exchange-traded funds (ETFs) that track ether’s price.
Joe DiPasquale, CEO of BitBull Capital, stated in an email that ether’s price rise is the result of “renewed inflows, a supportive macro backdrop, and optimism around potential spot ETF approvals.” Brian Huang, cofounder of Glider, added that digital asset treasury holdings of ether by companies have surged and that ETH ETFs are seeing “record inflows.” He noted that recent announcements from companies like Stripe and Circle, now supporting Ethereum-compatible networks, strengthen Ethereum’s use as a main platform for Web3 applications.
Analysts emphasized momentum trading as another key factor. Momentum trading involves investors buying an asset expecting its upward trend will continue. DiPasquale commented, “Once it cleared major resistance, momentum traders piled in, amplifying the rally. With liquidity improving and sentiment turning bullish, buyers are positioning for further upside after a long period of consolidation.” Tim Enneking, managing partner of Psalion, said ether is being bought as a “momentum trade” with the goal of regaining strength against bitcoin. Enneking provided context, noting that for ether to match bitcoin’s recent gains, its price would need to rise further to $5,300 without bitcoin setting a new all-time high.
There is a growing shift toward ether over bitcoin among investors. Julio Moreno, head of research at CryptoQuant, commented, “ETH continues to be favored by investors and traders over Bitcoin, increasing the demand for ETH relative to Bitcoin. This has caused the price of ETH to rally and outperform Bitcoin’s.” According to Moreno, the ratio of ETH ETF holdings to Bitcoin ETF holdings has tripled since May, and ether’s spot trading volume has outpaced bitcoin’s for the past five weeks.
One contributing factor to ether’s rise is a change in market mood. Daniel Polotsky, founder and chairman of CoinFlip, observed that past concerns over Ethereum’s scalability and high transaction fees may have led to overly negative sentiment. He noted, “In April, ETH hit a very low point vs. Bitcoin, when it was trading at 0.019 ETH per BTC. That ratio between the two hadn’t been seen since late 2019, meaning that the sentiment was probably way too bearish and not matching reality.” He linked the recent rebound above $4,500 to a return to more balanced investor perspectives.
Analysts suggest that a combination of institutional flows, momentum trading, improved network integration, and changing sentiment has driven ether’s latest rally, allowing it to outpace bitcoin in several key financial metrics.
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