Mike Smith
2 hours ago
Ethereum has come close to the historical maximum of about $4.865, and the dynamics is more and more reminiscent of a “catch-up trade” after a series of records in BTC. Inflows into regulated spot funds on ETH are increasing, the circle of institutional participants is expanding, and volatility is controlled. Drawdowns are redeemed quickly and the $4,700-$4,900 range is becoming a working value zone with a higher liquidity center. The volume profile is steadily climbing and the risk premium is decreasing compared to historical levels.
The Pectra update has strengthened the fundamentals. It has simplified wallets and reduced L2 costs. EIP-7702 accelerated the move to smart accounts: an address can be temporarily turned into a contract, multiple actions can be combined into a single transaction, and sponsored gas can be used. The result is less friction in onboarding, higher conversion rates in products on top of the network, and a marked increase in application authorizations.
Capital flows confirm the trend. Spot funds on Ether are recording steady inflows, while some money is being reallocated from bitcoin instruments to a more “growth” idea. ETH is increasingly perceived not only as a diversifier, but also as a bet on settlement and tokenization segments, where stable tokens generate a significant share of commissions. The sentiment is supported by the macro backdrop: expectations of monetary policy easing expand the demand for risk, and regulation of stock products adds predictability. Analysts at major banks are raising their benchmarks, noting that in August, inflows into ETH funds outpaced the dynamics of bitcoin products.
The tech resonates with the fundamentals. A dense buyer layer has formed above $4,720, and a consolidation above $4,870-$4,900 would open the way for a peak renewal. Consolidations are shorter, impulses are more voluminous - a typical preparation for trend extension. The working tactic is a staggered set with risk control: addition on pullbacks to supports and partial fixation on accelerations.
New opportunities bring threats as well. EIP-7702 functionality is already used in phishing schemes that disguise malicious operations as usual actions. These are not protocol failures, but procedural risks: non-obvious delegations of rights, batch operations, and silent authorizations. Mature participants are tightening transaction coordination, introducing limits on batch actions and explicit warnings in the interface - thus reducing the human factor where UX has become faster.
In corporate treasuries, ETH is moving from an experimental position to a liquidity management and investor communication tool. Regulated packaging of access through funds makes accounting and reporting easier, and liquid derivatives allow neat hedge structures without excessive leverage. When the discount rate is normalized, even moderate inflows from “slow” money form long spot deficits. The market encourages predictable processes and discipline, and this is what moves Ethereum from being an idea with a nice story to a working growth tool.
