Ethereum Up 100% and Bernstein Explains What’s Behind It

• Stablecoin tokenization reinforces Ethereum dominance
• Institutional Layer 2 increases demand for ETH
• Short reversal boosts ETH price

Ethereum has seen a significant increase in value of almost 100% since its April highs, with 65% in the last 30 days alone, reaching the $2.750 mark. Despite lagging behind Bitcoin and layer-1 cryptocurrencies in this cycle, analysts at Bernstein point to three key factors in ETH's recovery.

The first is related to the growing adoption of stablecoins and asset tokenization. Stripe acquired stablecoin platform Bridge for $1,1 billion and Meta is once again considering initiatives in the sector. This movement reignites the focus on base blockchains, and Ethereum leads this segment, with 51% of the stablecoin supply in circulation.

In addition, asset managers such as BlackRock and Franklin Templeton are investing heavily in the tokenization of real-world assets, a market already valued at more than US$22 billion. Ethereum has been the main network used in these projects, strengthening its role as an infrastructure for institutional applications.

The second factor involves the growth of Layer 2 solutions. Networks like Base, developed by Coinbase, have brought in around $84 million in annual revenue. According to analysts, this demonstrates how these solutions are being incorporated by exchanges and financial services, increasing the utility of Ethereum as a means of settlement and execution of smart contracts.

Another example cited is Robinhood, which acquired WonderFi, an operator of a Layer 2 network built on Ethereum. With this, there is an expectation that tokenized shares could be offered directly on these networks, increasing the demand for ETH as a gas and settlement asset.

Finally, the reversal of short positions also played a significant role. Hedge funds that previously held delta-neutral strategies — buying BTC or SOL and selling ETH — have been abandoning this positioning. With the narrative shifting towards institutional adoption and practical utility, Ethereum is no longer seen as the weak link among the major cryptocurrencies.

This movement, according to analysts, also benefits brokers and trading platforms, as the return of liquidity to assets other than Bitcoin stimulates retail engagement and an increase in transaction volumes.