Ethereum ETF Approval Hopes Surge as ETH On-Chain Activity Hits Yearly High

Ethereum ETF Approval Hopes Surge, ETH On-Chain Activity Hits Yearly High

As market expectations for SEC approval of spot Ethereum ETFs intensify, on-chain activity on the Ethereum network has surged, with multiple metrics hitting new highs for the year. This trend reflects institutional demand for compliant ETH exposure and a revival in retail sentiment, providing short-term support for ETH prices.

I. ETF Approval Expectations: From 'Maybe' to 'When'

Since the approval of spot Bitcoin ETFs in early 2024, market focus has quickly shifted to Ethereum. Several asset management firms, including BlackRock and Fidelity, have filed for spot Ethereum ETFs with the SEC. Although the SEC has repeatedly delayed decisions, recent regulatory signals show subtle shifts. According to sources, technical discussions between SEC staff and applicants have become more frequent, with key details on custody and market surveillance being finalized. The market broadly believes the probability of SEC approval by Q2 2025 has significantly increased.

This expectation has directly driven short-term ETH price strength. While exact gains are hard to quantify due to market volatility, CoinGecko data shows that ETH trading volumes and price levels have notably risen during news-heavy periods, indicating capital moving from观望 to positioning.

II. On-Chain Activity Surge: DeFi and NFT Dual Drivers

In parallel with ETF expectations, Ethereum on-chain activity has exploded. According to Dune Analytics, daily active addresses, transaction counts, and gas fees on the Ethereum mainnet have all reached their highest levels since 2024. Total value locked (TVL) in DeFi grew over 15% in two weeks, with top protocols like Uniswap and Aave posting quarterly highs in daily trading volume. The NFT market is also active, with daily trading volumes on platforms like Blur and OpenSea up over 30% month-over-month, and floor prices for several blue-chip NFT collections recovering notably.

The surge in gas fees is the most visible sign of on-chain activity. Etherscan data shows average gas prices briefly exceeded 100 Gwei, the first time this year. While high gas fees burden ordinary users, they are also seen as a positive signal of strong network demand. Analysts attribute this to 'front-running' behavior linked to ETF expectations: institutional investors position via OTC or large on-chain transactions, while retail investors rush in due to FOMO, collectively increasing network congestion.

III. Institutional Inflows and Retail Sentiment Converge

Institutional capital inflows are a key driver of recent ETH on-chain activity. CoinShares reports that Ethereum-linked investment products have seen net inflows for several consecutive weeks, with weekly inflows even surpassing Bitcoin products during periods of heightened ETF expectations. This indicates that institutional investors view Ethereum as the most important digital asset allocation after Bitcoin, especially after Ethereum's transition to proof-of-stake (PoS), which enhances its 'yield-bearing' attribute (staking rewards).

Retail sentiment has also been ignited. Social media discussions about Ethereum have surged, with Google Trends data showing 'Ethereum ETF' searches hitting all-time highs. Retail participation is evident not only in increased on-chain transaction volumes but also in open interest in perpetual contracts. Bybit data shows ETH perpetual contract funding rates briefly turned positive, indicating bullish sentiment dominance. However, analysts caution that rapid retail sentiment heating often accompanies high volatility, and short-term prices may correct on profit-taking.

IV. Short-Term Price Impact: Optimism with Caution Against Overheating

Overall, the combination of ETF approval expectations, surging on-chain activity, and capital inflows provides short-term upward momentum for ETH prices. The market broadly believes that if the SEC formally approves spot Ethereum ETFs, ETH could replicate Bitcoin's early-2024 trajectory with significant short-term gains. However, current high gas fees and overheated retail sentiment may signal a short-term top. Historical patterns show that when gas fees remain elevated and social media discussion reaches extreme levels, the market often faces correction risks.

Additionally, the SEC's final decision remains uncertain. Despite optimistic market expectations, regulators may delay or reject applications due to concerns over market manipulation or investor protection. Therefore, investors should remain rational and avoid blindly chasing highs.

Risk Warning

The above content is for reference only and does not constitute investment advice. The cryptocurrency market is highly volatile and risky; investors should make decisions based on their own risk tolerance. Data and analysis herein are based on public information and are not guaranteed for accuracy or completeness.