Institutional Investors Increase Ethereum Purchases for Staking and Risk Hedging

Institutional investors are actively purchasing Ethereum, while retail traders remain on the sidelines. This divergence is attributed to differences in access to capital, analytics, and investment approaches, according to several experts.

“Institutional clients are turning to regulated platforms to hedge macro risks,” stated Emma Shi, head of HashKey OTC.

A sign of “whale” demand is the record volume of assets in American spot Ethereum ETFs. On July 31, it reached $21.52 billion.

This trend is confirmed by the activity of Bitmine. It has become the world’s largest corporate holder of Ethereum with 833,000 ETH (~$3 billion) on its balance sheet.

Data from Lookonchain shows that since July 9, 14 new wallets have accumulated 856,554 ETH.

Whales/Institutions Keep Buying $ETH!

Another 3 fresh wallets bought 63,837 $ETH($236M) via FalconX and Galaxy Digital OTC today.

Since July 9, a total of 14 fresh wallets have accumulated 856,554 $ETH($3.16B).https://t.co/sOy4Pd7r1Zhttps://t.co/0cjdfOiJnw… pic.twitter.com/b8PImzawCw

— Lookonchain (@lookonchain) August 5, 2025

Three of these wallets acquired 63,837 ETH ($236 million) through OTC platforms FalconX and Galaxy Digital.

Amidst this, data from the Kiyotaka platform indicates indecision among retail investors.

$ETH remains underowned this entire rally — latest dip saw minimal buying

Perps positioning says it all: still underowned as most traders are sitting on the sidelines, expecting lower. pic.twitter.com/zKX2qlsyLT

— Kiyotaka (@kiyotaka_ai) August 4, 2025

The ratio of long to short positions on Ethereum futures has been declining since April, indicating a wait-and-see stance.

According to Shi, retail traders are thinking “defensively” and want to “restore capital” first. Large players, however, view dips as a “discount” and a buying opportunity.

Institutions Focus on Ethereum

Corporations are increasingly preferring Ethereum over Bitcoin as a tool for hedging inflation. Unlike the first cryptocurrency, Ethereum allows for staking income of 3-4% per annum.

According to Reuters, by the end of July, companies held at least 966,304 ETH (~$3.5 billion) on their balance sheets. At the end of 2024, this figure was 116,000 ETH.

“Ethereum is the foundation of decentralized finance, not just a store of value. Owning it is like owning oil, whereas Bitcoin is more like gold,” noted Anthony Georgiades, partner at venture firm Innovating Capital.

However, analysts have urged caution. Regulatory uncertainty, especially regarding staking, and price volatility remain significant obstacles.

“Most CFOs will not exchange liquid cash for Ethereum. It remains a niche instrument,” believes Anuj Karnik, managing director of Straitsberg.

The sharp rise in shares of companies like Bitmine following announcements of purchases of the second-largest cryptocurrency by market capitalization has been called “signs of meme madness” by some experts.

Some companies continue to increase their investments despite the associated risks. To finance Ethereum purchases, they raise capital by issuing shares or debt instruments. GameSquare CEO Justin Kenna noted that the company will “act according to the situation” regarding further investments.

At the time of writing, the second-largest cryptocurrency by market capitalization is trading at $3,629 (-0.2% for the day), according to CoinGecko. Over the month, the coin’s price has risen by 44%.

On August 4, the net outflow of capital from Ethereum-based exchange-traded funds reached a record $465.06 million.