Key Points
- Bernstein analysts predict a bullish future for Ethereum, spurred by likely ETF staking yield approval.
- Other positive factors include strong ETH ETF flows and increased interest from institutional investors.
Bernstein, a research and brokerage firm, has expressed optimism about Ethereum (ETH) due to a probable approval of ETH ETF staking in the US.
ETH ETF Staking Approval
The firm’s analysts believe that the Trump administration may approve ETH staking yield, which could be an attractive yield in light of Federal rate interest cuts. This would contrast with the situation in Hong Kong, where ETH ETF staking was not approved in July.
In May, Mike Novogratz of Galaxy Digital also predicted a similar outcome, with a potential timeline of mid-2025 or 2026. Bernstein analysts believe that the current ETH staking yield of 3% could increase to 4-5% following ETF staking approval, which could attract more institutional investors.
Positive ETH ETF Flows
Bernstein also highlighted ETH’s strong demand and supply dynamics and positive ETF flows as additional catalysts. They noted that 28% of the 120 million ETH in supply was staked, and 10% was locked in deposit/lending platforms. This means that 60% of the supply remained untouched in the past year, indicating a resilient investor base and favorable demand/supply dynamics.
Furthermore, ETH ETF flows turned positive and surpassed Bitcoin ETFs for the first time. Bernstein believes this could further strengthen ETH’s strong demand/supply dynamics.
Lastly, Bernstein pointed to the high level of trust from large retail and institutional investors in the Ethereum network as a potential boost for ETH. They cited ETH’s Total Value Locked (TVL) of about 60% ($89B) as evidence of confidence among institutional players. As of the report, ETH was valued at $3.6K, representing a 47% increase in the past month.
