Ethereum (ETH) Could Surpass US$5K (AU$7.8K) Amid Institutional Demand and Network Activity: CryptoQuant

CryptoQuant has released a report stating that Ethereum's ETH could reach over US$5K (AU$7.8K) thanks to institutional demand and network activity.

CryptoQuant has released a report stating that institutional demand and network activity could propel Ethereum’s (CRYPTO: ETH) price to over $5,000 this year.

According to the firm, inflows into spot Ethereum exchange-traded funds (ETFs) have “broken records” with over $1.9 billion being poured into the funds in the last 13 days, bringing total net assets to $13.18 billion, as per data from SoSo Value.

What Happened: Ethereum has also seen increased activity, with total daily transactions averaging between 6.5 and 7.5 million for most of this year, compared to an average of around 5 million per day in 2023.

“This activity level is a key driver of ETH's scarcity and could contribute to price appreciation,” the report said.

Institutions have been flocking to Ethereum ETFs, with Microsoft (NASDAQ:MSFT) also being open to investing in the funds, according to a report by Blockworks.

This的消息 comes as a blow to Bitcoin (CRYPTO: BTC) maximalists like Michael Saylor, who have been advocating for apex crypto to be included in these funds.

The speculation started after Matthew Sigel, VanEck's head of digital assets research, said on X post that Microsoft might consider investing in an Ethereum ETF if it includes staking features.

This possibility was suggested following comments by Microsoft CFO Amy Hood during the company's annual shareholder meeting, where the Bitcoin proposal was overwhelmingly rejected (less than one percent of shareholders voted in favor).

Sounds to me like $MSFT is open to an #ETH ETF as long as they can collect staking income ?‍♂️ pic.twitter.com/qtZ2InSZhV

Hood said that Microsoft has been accepting cryptocurrency payments since 2014 and considers crypto an asset class, but its investment priorities are centered on liquidity, capital preservation and income generation.

“We have been accepting cryptocurrency as a payment method since 2014. Crypto is an asset class that we follow, but our investment priorities are centered on liquidity, capital preservation and income generation,” Hood said.

Staking, Ethereum ETFs' Missing Piece: While this sounds promising, it may be more complicated.

The Securities and Exchange Commission (SEC) has demanded that Ethereum ETFs exclude staking features due to regulatory and compliance concerns.

Specifically, the SEC views staking services as constituting unregistered securities offerings.

This view could change under a new SEC administration, but it would still be complicated for the SEC to allow staking services without a new regulatory framework.

Moreover, current spot Ethereum ETFs process redemptions in 24 hours, while staking often involves lock-up periods.

Integrating staking services into Ethereum ETFs would be a massive advantage.

Analysts say it could significantly lower management fees, making them more attractive to investors by combining income generation with minimal costs.

This move would also enhance Ethereum ETFs’ competitiveness against Bitcoin ETFs, which currently dominate the market.

For instance, Nate Geraci, president of the ETF Store, said that he believes Ethereum ETFs with staking capabilities are a question of “when, not if.”