Ethereum is on fire and looking at $8000 if the current momentum continues with increased institutional demand and massive global liquidity joining the punch. We find that the crypto’s price fluctuations almost monotonically track the course of the global M2 money supply. Continued at this pace, the $8000 bar seems easily achievable. Recent, on-the-ground data and analysis by key stakeholders only strengthens this optimistic approach.
Ethereum's Market Performance
Ethereum has shown extraordinary bullishness, recently recording its 20th month of gains in a row. Data from the Federal Reserve shows that Ethereum made the biggest yearly jump since July 2022. Having rallied more than 150% since those lows in April 2024, Ethereum is on a strong upward trend. While it did briefly surpass $3,900, a later pullback was seen from the $3,900 mark, which followed a massive 640,000 ETH unlocking event. Despite these moves, Ethereum has a clear demand zone at $3,600, showing strong underlying support.
One recent analysis by crypto analyst Ted Pillows further strengthens the bullish case for Ethereum. Pillows' analysis underscores the factors driving Ethereum's potential growth and resilience in the market. The independent analyst is convinced that Ethereum’s performance is not just speculative. Rather, it is based on strong economic fundamentals and the supply-demand balance in the market.
Institutional Appetite and ETF Inflows
Ethereum has now become the third-fastest ETF to ever accomplish the significant feat. It trailed just ahead of BlackRock’s IBIT and FBTC Bitcoin ETFs, a testament to its growing acceptance from institutional investors. On July 24, spot ETH ETFs had record inflows of $214 million. This achievement represents the 15th straight day of net positive cash inflows for Ethereum ETFs. This continued inflow is a clear signal of strong, growing institutional appetite for Ethereum and serves as a sign of strength to the pair’s market position.
This rising demand from institutions is perhaps the most important reason why Ethereum could rise to new price peaks. This is important because institutional investment not only offers billions of dollars of capital but brings credibility and stability to the cryptocurrency market. Now the steady flow of positive ETF cash inflows is an indication of long-term confidence in Ethereum’s value and growth prospects.
M2 Money Supply and Future Outlook
U.S. M2 money supply in June 2024 had increased by the equivalent of 4.5% over those 12 months. … to an all-time record high of $22.02 trillion. In the past, Ethereum’s price movements have followed the M2 money supply very closely. At the same time the U.S. M2 money supply has blown up to historical highs. Added to the mix of consistent ETF inflows, analysts are collectively predicting a major breakout for Ethereum. Many analysts have proposed that, judging by the most recent M2 spike, Ethereum should be at least worth upwards of $8,000.
Looking forward, perhaps the strongest indicator of Ethereum’s price movements is the correlation between Ethereum’s price and the M2 money supply. When the money supply grows, values of existing assets tend to go up. Ethereum is well-positioned to benefit from this growing trend! This unique intersection of macroeconomic forces and market dynamics uniquely position Ethereum to be one of the biggest growth stories in the coming years.
