PiCK
Summary
- Dominic Basulto said persistent outflows from spot Ethereum ETFs signal weak demand from institutional investors.
- He said the drop in active Ethereum addresses and the rise of rival blockchains such as Solana are threatening Ethereum's DeFi dominance.
- He added that despite the potential of stablecoins and asset tokenization, Ethereum faces a risk of further declines because of the current retreat by institutional investors.
Forecast Trend Report by Period
Ethereum is facing weaker demand from institutional investors, according to an analysis.
The Motley Fool, a U.S. investment publication, reported on Nov. 12 that analyst Dominic Basulto wrote that persistent outflows from spot Ethereum exchange-traded funds are a clear sign of weak institutional demand. Without large inflows from institutional investors, a new uptrend before 2027 will be difficult, he wrote.
Spot Ethereum ETFs previously recorded net outflows for 23 consecutive trading sessions from Sept. 29 to Oct. 30.
Slowing activity on the Ethereum network was also cited as a concern. Basulto wrote that the number of active Ethereum addresses had fallen to its lowest level since December last year. Rival blockchains such as Solana are also threatening Ethereum's dominance in the decentralized finance, or DeFi, market.
He added that stablecoins and asset tokenization could serve as long-term growth drivers for Ethereum. For now, however, the bigger issue is the retreat of institutional investors. If institutions are reducing their Ethereum exposure, that raises the risk of further declines.
Uk Jin
