Ethereum’s recent surge has surprised many, defying its underperformance against Bitcoin for months. Bernstein analysts have pinpointed three key drivers behind this unexpected rally: stablecoin adoption, institutional investment, and short liquidations. 💰🚀 📚
Specifically, Gautam Chhugani’s team highlighted the expanding role of stablecoins in driving ETH’s momentum, as they are increasingly used for payments. They also emphasized the increasing acceptance of Ethereum as a platform for tokenized securities and other DeFi applications, leading to more active trading activity.
Bernstein emphasizes that this growth is not limited to store-of-value use cases. The firm has noted the increasing adoption of stablecoins in payment flows and the broader trend towards tokenized securities on the Ethereum network. Notably, they emphasize Ethereum’s dominant position within the stablecoin ecosystem, holding 51% of total supply.
Finally, analysts highlight that institutional investors who were previously bearish on Ethereum are now turning to ETH with increased adoption due to its usage in Layer 2 enterprise infrastructure projects like Base (by Coinbase). This has resulted in an increase in demand for Ethereum and positions it as a frontrunner in the realm of enterprise-level smart contract development. 💪
**Note: This is not investment advice.**