ETH returns to $3000: Six reasons boost the alt season is coming?

This morning, ETH briefly broke through the 3000 USD mark for the first time since early February this year. In recent days, the ETH market has changed its previous downturn, rising from around 2500 USD to 3000 USD. As of the time of writing, the seven-day rise is 16.2%.

According to 8marketcap data, the market capitalization of Ethereum has risen to 361.68 billion USD, surpassing SAP, and ranking 35th in the global asset market capitalization. Although the rise of ETH has a correlation with BTC, what other factors are affecting the ETH market? What do industry insiders say? Is Ethereum leading the altcoin season?

1. What factors are driving the rise of ETH market?

1. Stablecoin ecosystem drive

On the Ethereum network, the issuance of stablecoins remains active, serving as the on-chain cash engine that drives continuous demand for ETH block space, ensuring liquidity in the Ethereum blockchain ecosystem. On June 26, the adoption rate of stablecoins based on Ethereum reached an all-time high, with over 750,000 weekly unique users. USDT and USDC together account for the majority of the approximately $134 billion stablecoin market on the network.

• On March 25, the Trump family project World Liberty Financial launched the stablecoin USD1, issued on Ethereum and Binance Smart Chain.
• On June 10, Société Générale-Forge, the crypto subsidiary of Société Générale, announced the launch of a stablecoin pegged to the US dollar - USDCV, issued on the Ethereum and Solana blockchains.
• On May 22, Circle issued an additional 100 million USDC on the Ethereum network.
• On June 18, Tether minted 1 billion USDT on the Ethereum network.
• On July 4th, Tether issued an additional 1 billion USDT on the Ethereum network.

In addition, stablecoins play an important role in trading and lending. They are not only a crucial asset in the DeFi space but also help drive Ethereum's trading volume and asset liquidity. According to Token Terminal data, the active lending amount of lending protocols on Ethereum has reached $22.6 billion, setting a new historical high. Key players in this market include Aave, Spark, Morpho, Maple, Fluid, Compound, Euler, and others.

2. The number of Ethereum treasury enterprises is gradually increasing.

More and more enterprises are using ETH as treasury assets, which will undoubtedly strengthen Ethereum's position as "digital gold" in asset allocation, and also proves that enterprises are optimistic about the development prospects and future market trends of Ethereum.

• On June 26, the US listed company Bit Digital announced a strategic transformation, planning to gradually stop its Bitcoin mining business and slowly convert its held BTC into ETH, focusing on Ethereum staking and asset allocation, becoming a "pure Ethereum staking and treasury company."
• From June 28 to July 4, SharpLink Gaming spent approximately 19.2 million USD to increase its holdings by 7,689 ETH. On July 10, SharpLink Gaming increased its holdings by 5,072 ETH, worth about 13.51 million USD. On July 11, SharpLink Gaming again increased its holdings by 12,648 ETH, worth 35.31 million USD. Currently, the company holds over 222,000 ETH, with an average purchase price of 2,617 USD.
• On June 30, BitMine announced the pricing and signed a private placement agreement, to purchase and sell 55,555,556 shares of common stock (or equivalent common stock substitutes) at a price of $4.50 per share, with expected total proceeds of approximately $250 million, net of placement agent fees and other issuance expenses (funded through a combination of cash and cryptocurrency), to implement its ETH financial strategy.
• On July 8, GameSquare Holdings, Inc. announced that the board has approved a phased establishment of an Ethereum treasury, with a total amount of up to $100 million. It will sell 8,421,054 shares of common stock (or equivalents) at a price of $0.95 per share, with total proceeds before underwriting discounts and commissions and issuance costs expected to be approximately $8 million, as the first batch of expenses for establishing the Ethereum treasury. On July 10, GameSquare took further action: it announced that it has spent $5 million to acquire 1,818.84 ETH to support its Ethereum treasury.
• On July 8, blockchain technology company BTCS Inc. plans to raise $100 million to acquire Ethereum by 2025. This move is part of the company's long-term vision to build a leading publicly traded company focused on Ethereum infrastructure, while continuing to be one of the largest holders of ETH among public companies. Depending on market conditions, the company plans to raise funds in a rolling manner to acquire Ethereum, and is committed to maximizing capital efficiency. BTCS CEO Charles Allen (Charles Allen) stated: "We believe Ethereum has tremendous growth potential and is at the core of future digital financial infrastructure. Now that Ethereum's price is at 2021 levels, it is the right time for us to deepen our investments."
• On July 10th, Thumzup Media Corporation has expanded its crypto funding strategy beyond Bitcoin, covering several major digital assets, including ETH), SOL, and others.

The Daily Gwei founder Anthony Sassano pointed out: The amount of ETH purchased by companies holding Ethereum as their treasury asset has exceeded the amount of newly issued ETH. In the past 30 days, approximately 77,000 new ETH has been issued (net issuance after burning is about 57,000). Meanwhile, during the same period, Ethereum treasury companies purchased over 200,000 ETH.

3. Whale Buy

• On July 5, a giant whale purchased 1616.53 ETH during a rapid market decline, with a total value of approximately 4.038 million USD and an average purchase price of 2492.04 USD.
• On July 9th, according to OnchainLens monitoring, a certain whale address sold 69.07 WBTC (approximately $7.49 million) to buy 2881 ETH at an average purchase price of $2600.
• On July 10th, according to on-chain analysis platform Lookonchain, within one day, 7 institutions or whale accounts collectively purchased 127,971 ETH, worth approximately $358 million.
• On July 10, according to @ai_9684xtpa monitoring, two addresses increased their holdings by over 12,000 ETH, with a total value of approximately 33 million USD. Among them: the address starting with 0x8C0 spent 25 million USD to buy 9187.52 ETH in the past 7 hours, at an average price of 2721 USD; pfm.eth re-entered the ETH market after two months, purchasing 2900.5 ETH at an average price of 2766 USD, valued at about 8.02 million USD.

The actions of giant whales can serve as a reference for market confidence. Frequent large purchases by whales indicate that confidence in the price trend of ETH is recovering, which will be beneficial for the future market.

4. Ethereum Official Strategy

On July 10, the Ethereum Foundation announced a reorganization of its ecosystem development strategy (EcoDev), focusing on four key areas. The plan includes the establishment of four new teams dedicated to ecosystem acceleration, covering corporate relations, developer growth, application research, and founder support. The Foundation will also strengthen its ecosystem expansion efforts, continue to provide funding support, and commit to addressing global adoption barriers. This adjustment aims to achieve two main goals: expanding the Ethereum user base and enhancing the resilience of its technical and social infrastructure. The Foundation emphasizes that it will work with a wide range of partners in the ecosystem to drive the growth and development of Ethereum.

On July 4th, the Ethereum Community Fund had previously stated on platform X that it would release complete funding details, the first batch of work initiatives, core team and contribution value information, as well as disclose how to apply or contribute in the coming weeks. The Ethereum Community Fund stated that the organization is not a think tank, but a "combat fund" aimed at pushing ETH to reach $10,000. ETH is on-chain infrastructure, a public good, and censorship-resistant.

Ethereum co-founder Vitalik Buterin and Ethereum researcher Toni Wahrstätter co-authored the proposal EIP-7983, which aims to set the Gas limit for a single Ethereum transaction at 16.77 million. This proposal aims to reduce the risk of denial-of-service (DoS) attacks, optimize the performance of zero-knowledge virtual machines (zkVM), and balance overall Gas usage efficiency.

5. The shift in U.S. cryptocurrency policy

On July 5th, Grayscale posted on platform X: "We believe that Ethereum may benefit from the U.S. shift towards a more crypto-friendly policy. New legislation like the Genius Act may clarify stablecoin regulations, drive investment, and accelerate the adoption of smart contracts. With strong development activity and expansion plans, Ethereum is well-positioned to profit from this."

Recently, the U.S. "GENIUS Act" and "CLARITY Act" have attracted attention, and the shift in U.S. crypto policy has provided a more favorable development environment for various projects in the Ethereum ecosystem. This will attract more developers to participate in the construction of the Ethereum ecosystem and promote innovation and development of applications such as DeFi and NFTs, further consolidating Ethereum's position in the blockchain field. Additionally, as a demonstration zone for crypto regulation, U.S. policy direction will also influence the global cryptocurrency regulatory landscape. If U.S. regulatory policies are favorable for ETH prices, clearer global regulatory policies in the future will further drive ETH price rise. U.S. regulatory policies are bringing medium- to long-term policy benefits for Ethereum in terms of compliance pathways and institutional participation.

6. Ethereum ETF continues to experience net inflows.

Recently, the Ethereum ETF has been in a state of net capital inflow, especially with the largest amounts in the last two days: On July 10, the net inflow of the US spot Ethereum ETF was $383.1 million, which is also the second highest net inflow in the history of the fund; On July 9, the net inflow was $211.3 million; On July 8, the net inflow was $29.5 million; On July 7, the net inflow was $62.1 million…

Bitwise Chief Investment Officer Matt Hougan believes that inflows into Ethereum exchange-traded funds will accelerate significantly in the second half of the year, as more stablecoins and stocks begin to trade on the Ethereum chain, which is a phenomenon easily understood by traditional investors. In June of this year, the inflow of funds into Ethereum ETFs has already reached $1.17 billion, and if this trend continues, the inflow scale of Ethereum ETFs in the second half of the year is expected to reach $10 billion.

The continuous net inflow of Ethereum ETFs means that more funds are flowing into the market to purchase assets related to ETH, which directly increases the demand for ETH. As the supply of Ethereum remains relatively stable over a certain period, according to the principle of supply and demand, the increase in demand will inevitably drive the price of ETH to rise.

2. Views of Industry Institutions and Individuals

• 10x Research pointed out on July 9: Currently, the price of Ethereum (ETH-USDT) is above the 7-day moving average and the 30-day moving average, which indicates that the ETH price is in a bullish trend. Over the past week, the ETH price has risen by about 3.6%, a trend possibly driven by approximately $148.5 million in inflows into Ethereum ETFs, particularly as BlackRock's Ethereum ETF began accumulating ETH, with the current asset size of this ETF reaching about $4.6 billion. In addition, BitMine raised $250 million to support ETH asset strategies, and SharpLink Gaming increased its holdings by 9,468 ETH, enhancing institutional demand.
• Matrixport points out: Overlaying the historical seasonal strength of July, the current price structure of Ethereum is not only driven by market inertia but also reflects the resonance of fundamental support and market expectations. For bullish holders, $2,500 should still be regarded as a key technical support level.
• Bankless co-founder David Hoffman stated that Ethereum's ongoing investment in trusted neutrality and MEV (Miner Extractable Value) minimization may provide it with additional advantages for adoption in the traditional finance (TradFi) sector. He pointed out that blockchains like Robinhood, which use a single sorter, do not face illegal MEV issues, but Ethereum's investment in fair MEV infrastructure is akin to 'compliance' efforts in traditional finance. This investment could become a key driving factor for traditional financial institutions to choose Ethereum over other blockchains, further enhancing Ethereum's competitiveness in compliance and technical trustworthiness.
• Former Ethereum core developer Eric Conner stated that Ethereum has been fluctuating between $2400 and $2600 for weeks, with decreasing trading volume, and subtle highs and lows appearing. Long-term consolidation often leads to sharp volatility. Therefore, if ETH firmly breaks through $2600, the trend may be rapid and severe.
• Nick Tomaino, the founder of 1confirmation, disclosed data indicating that Ethereum has captured over 80% of the real-world asset (RWA) market share and 50% of the stablecoin market share, trusting RWA and trusting stablecoins is equivalent to trusting ETH.

3. Will Ethereum lead the altcoin season?

The data analysis platform Swissblock points out that the current trend of Ethereum against Bitcoin is much more bullish than in the second quarter, which may indicate the beginning of altcoin season. Analysis indicates that the inflow momentum of Ethereum is strengthening, and the narrative of its ecosystem is also enhancing, contrasting sharply with the weakening momentum of Bitcoin and the consolidation. If ETH remains strong, it may mark the true beginning of altcoin season. This shift aligns with the decline of BTC dominance, which has historically marked the rise of altcoins.

The strong and obvious demand from institutional investors for Ethereum recently has further pushed up the rise of Ethereum. The Chicago Mercantile Exchange (CME) Ethereum futures open interest has climbed to 3.27 billion USD, reaching the highest level since February 2. This surge indicates that institutional investors' positions have increased, reflecting a growing interest from professional investors in ETH as price momentum strengthens.

4. Summary

ETH has today broken through the $3000 mark due to multiple factors including the increase in Ethereum treasury enterprises, whale buying, the strategic shift of Ethereum, the change in U.S. crypto policy, net inflows into Ethereum ETFs, and the drive from the stablecoin ecosystem. Industry insiders generally hold an optimistic view on the prospects of ETH, and data analysis platforms believe that altcoins are about to take off.

In the short term, the influx of funds directly benefits the price trend of ETH, but in the long run, factors such as technological development, ecological construction, the favor of traditional finance, and the improvement of regulatory policies are what enhance the long-term investment value of ETH.