The growth of Ethereum, the inflow of money into ETH ETFs, and the new wave of investors

Ethereum (ETH) has been trading in a relatively narrow range between $2,370 and $2,770 since May 10, however, some indicators suggest bullish potential.

ETH continues to lead the blockchain space in both deposits and activity as it analyzes layer-2 scaling solutions.

Although it cannot regain the ATH level in the 2024–25 cycle, there is no "Ethereum killer" that can reach a total value locked (TVL) of 66.6 billion USD (TVL). According to data from DefiLlama, Ethereum currently holds a 61% market dominance, while the two largest competitors combined only account for 14%.

! Total market share of locked asset value (TVL) | Source: DefiLlamaTVL of the Ethereum base layer has risen 6% over the past 30 days, led by gains from Pendle, Ethena, and Spark. In contrast, BNB Chain has fallen by 6% and Solana's deposits have fallen by 2%. More importantly, the increase in deposits on these blockchains during the memecoin craze in early 2025 is not sustainable.

Ethereum has lost market share in trading volume on decentralized exchanges (DEX) due to high base layer fees, and this remains a barrier for most users.

However, its layer-2 solutions have collectively recorded 70 billion USD in DEX activity over 30 days, maintaining Ethereum's leading position across the ecosystem. Notable contributing projects include Base, Arbitrum, Unichain, and Polygon.

DEX volume ranking in 30 days, USD | Source: DefiLlamaInterestingly, some networks that once aimed to challenge Ethereum's dominance with base layer scalability have now slipped off the list of the top 6 networks by DEX activity.

For example, Tron recorded only $4.5 billion in 30-day trading volume, while Avalanche reported $4.2 billion. In contrast, Ethereum and its scaling solutions reached a total of $136.8 billion.

Critics of Ether have raised concerns about the sustainability of Ethereum, pointing out a modest fee of 43.3 million USD over 30 days.

Recent network updates have prioritized the interests of rollups, introducing large, low-cost temporary data packages called blobs. As a result, profits for stakers have been negatively impacted, as the reduction in the supply of ETH largely depends on network fees.

Besides on-chain dominance, Ether remains the only altcoin approved by ETF funds in the United States. This advantage has helped create a market worth 10 billion USD, while competitors like Solana and XRP are still waiting for a decision from the U.S. Securities and Exchange Commission (SEC). Analysts expect the final ruling to be delivered by mid-October.

Since May 16, the ETH spot ETF funds have not recorded any days with net outflows, accumulating a net inflow of 837 million USD during this period.

Although this buying pressure seems modest compared to the average daily trading volume of ETH at 4 billion USD on major exchanges, it signals interest from institutional investors.

! ETH balance on exchanges | Source: GlassnodeEther's short-term supply, as measured by the amount of deposits on exchanges, has fallen to a record low of nearly 16.33 million ETH. At the same time, 28.3% of the total Ether supply is currently locked in staking platforms, a driver that supports the price as demand increases.

The strong growth of 48% for ETH from May 7 to May 14 indicates an imbalance between holders and potential buyers. Considering the on-chain statistics of Ethereum and the increasing demand for spot ETFs, this leading altcoin has the potential to break out above $2,800 in the near future.

Vincent