Ethereum has risen above $4600. Why are investors buying up the second most capitalized token?

Ethereum, the second largest cryptocurrency in terms of capitalization, came close to the record of the fall of 2021, when the price reached $4866 per token. The reason for the growth was the announcement of the largest public holder of Ethereum - BitMine Immersion Technologies - about plans to issue additional shares worth $24.5 billion, and the proceeds will be used to buy new tokens. BitMine shares strengthened by almost 6% in trading.

Ethereum on Wednesday morning rose in price by about 7% to $4617, and at the peak of the day the price reached $4678, follows from the quotations on the CoinMarketCap exchange. Ethereum thus approached its highest value since November 2021, when the record was set: according to the site, it amounted to $4891.70.

The growth of Ethereum is associated with the plans of the largest public holder of this cryptocurrency - BitMine Immersion Technologies - to issue additional shares worth $20 billion, and use the proceeds to buy new tokens. BitMine's shares rose by 5.9% to $62.4 in trading on August 12.

According to BitMine's filing with the U.S. Securities and Exchange Commission (SEC), the total amount of its planned equity offering has risen to $24.5 billion. The company intends to use the proceeds from the offering to make further Ethereum purchases. BitMine also disclosed that it owns just over 1.15 million Ethereum tokens, equivalent to $4.96 billion, and approximately 1% of all tokens in circulation. The company's goal is to eventually acquire 5% of all tokens in circulation.

Ethereum has risen by about 40% since the beginning of the year. The Motley Fool explains that the reasons for the increase in its value are increasing government support and growing interest from institutional investors.

An important factor was the passage of the GENIUS Act, which regulates the stackcoin market: many leading tokens, including USDT and USDC, use the Ethereum blockchain, and their growing popularity could be a significant source of demand for Ethereum itself, according to the publication.

Ethereum volumes on exchanges hit a nine-year low on August 7, falling to 15.28 million tokens, according to Glassnode. This is the lowest since November 2016. Investors withdrawing their crypto assets from exchanges is generally considered a bullish signal, meaning they may be moving them to long-term storage, Cointelegraph explains.

On Monday, August 11, spot exchange traded funds (ETFs) tracking the price of Ethereum recorded their largest net inflows ever, totaling $1.01 billion, Cointelegraph reported. Inflows into ether-focused funds far surpassed those of bitcoin-ETFs, which received $178 million on the same day, according to Farside Investors.

The iShares Ethereum Trust ETF from BlackRock attracted the largest amount of new funds - $640 million, which became a record for it. The second place is occupied by Fidelity Ethereum Fund, which also recorded the maximum one-day inflow of $277 million.

NovaDius president Nate Geraci wrote on social network X that spot ether ETFs were previously seriously undervalued "simply because traditional financial investors didn't understand what Ethereum was all about." He added that the attitude of institutional investors is now changing, with ether increasingly being hailed as "the foundation of future financial markets," and this is being echoed by the big players.

Onchain platform Token Terminal on Monday noted that the amount of assets placed in staking (a type of investment that helps keep the blockchain running and generates revenue for token holders) on the Ethereum network has surpassed the $150 billion mark for the first time.

This article was AI-translated and verified by a human editor