Ethereum Price Could Hit $5,000 Due to Institutional Demand: Insights from CryptoQuant

Institutional Demand Driving Ethereum Price Surge
Institutional investors are increasing their interest in Ethereum (ETH), which could push its price past $5,000 for the first time, according to a new report from CryptoQuant. This milestone would mark a significant achievement for Ethereum, the second-largest cryptocurrency by market capitalization.

Rising Demand from Institutional Investors

The report highlights that inflows to new Ethereum exchange-traded funds (ETFs) have set records, indicating a strong surge in demand. Over the past week alone, global Ethereum funds received $1.2 billion in new investments, a record-breaking inflow that follows the launch of spot ETH funds in the U.S.

This influx of institutional capital underscores the growing appeal of Ethereum as a digital asset. The spike in ETF inflows reflects heightened interest from institutional investors seeking exposure to ETH through regulated financial products.

On-Chain Activity at Record Highs

According to CryptoQuant, the on-chain activity of Ethereum has also been on the rise. The blockchain is currently processing between 6.5 to 7.5 million daily transactions, compared to around 5 million daily transactions last year. This increase indicates that more users are utilizing Ethereum’s network capabilities, supporting its adoption for decentralized applications (dApps) and other blockchain-based services.

CryptoQuant’s report emphasized that "higher network activity on Ethereum signifies increased usage and demand for the network’s capabilities, reflecting growing adoption of decentralized applications."

Valuation Metrics Signal Further Growth

Based on valuation metrics, CryptoQuant’s analysts believe that ETH could surpass $5,000 if current demand and supply trends continue. The report mentions that "renewed investor demand" is playing a pivotal role in driving Ethereum's price momentum. The combination of ETF inflows and increased on-chain activity indicates growing confidence in Ethereum’s future potential.

Ethereum’s Role in the Broader Crypto Market

The Ethereum network’s infrastructure is critical for decentralized exchanges (DEXs), stablecoins, and meme coins. These applications have seen a surge in popularity alongside the broader recovery of the crypto market in 2024. Ethereum’s versatility and widespread use case make it a cornerstone of the decentralized finance (DeFi) ecosystem.

Current Market Performance

As of now, Ethereum is trading at approximately $3,884 per coin, according to CoinGecko data. Over the past 30 days, its price has increased by nearly 19%, recently surpassing the $4,000 threshold for the first time since March 2024. Despite the positive price movement, Ethereum has yet to break its all-time high of $4,878, set in 2021.

Outlook and Investor Sentiment

The approval and launch of ETFs that offer exposure to Ethereum have added momentum to its price trajectory. While Bitcoin recently hit new all-time highs, Ethereum’s performance has been slightly more reserved. However, with institutional demand on the rise and strong on-chain fundamentals, analysts are optimistic about ETH’s path toward the $5,000 milestone.