Ethereum is closing in on its recent all-time high and could continue to surpass it to a new record high of $5,000 or more, if institutional demand and progress toward the Fusaka upgrade continues to be encouraging, an analyst said.
“Ethereum’s path to $5,000 will depend on the confluence of sustained institutional demand, upgrade-driven scalability, and favorable macro conditions,” said Javier Rodriguez-Alarcón, chief investment officer at digital asset investment firm XBTO. Decrypt. “Spot ETH ETFs saw robust inflows, of over $1.3 billion in the past week alone, signaling renewed conviction from institutional allocators.”
“On-chain metrics and whale accumulation patterns indicate that ETH may be entering an expansion phase reminiscent of Bitcoin’s breakthrough in 2020,” he added.
Ethereum ETFs are already off to a strong start for the week, bringing in $176.6 million during Monday’s trading session, according to data from Farside Investors. Last week, Ethereum funds around the world brought in $1.48 billion, according to a report from CoinShares, marking a substantial return after being in the red the previous week.
Ethereum came incredibly close to surpassing $5,000 in late August, when it hit a new all-time high of $4,946.05. Ethereum is currently changing hands for $4,560 after gaining over 10% since last week. This puts it 7.6% away from its all-time high price. Earlier Thursday, ETH hit $4,753, per CoinGecko.
Myriad users are increasingly convinced that the upward trend will continue for Ethereum. As of Tuesday morning, 80% of users thought ETH would hit $5,000 sooner than $3,500. This is a marked increase in optimism from last week, when users were evenly divided on what price Ethereum would see next.
Rodriguez-Alarcón, who has worked at BlackRock and JPMorgan, added that risky assets in general have benefited greatly from monetary policy signals coming from the U.S. Federal Reserve, which meets at the end of the month to decide on interest rates.
“On the macroeconomic front, a dovish Fed stance, continued pressure on fiat currencies and positive gold momentum could unlock additional flows into risk assets,” he said. “In this environment, Ethereum stands to benefit disproportionately given its fundamental role in DeFi infrastructure, stablecoins and tokenization.”
This macroeconomic environment has led to one of the biggest stock rallies in 15 years, as investors rush to emerging markets.
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“Dollar weakness has acted as a spark, but this rally is also about the maturity of emerging markets themselves,” wrote Nigel Green, CEO of deVere, in a note shared with Decrypt. He noted that Brazil, Mexico and South Africa are all seeing renewed interest from foreign investors.
