Ethereum hits new highs, but is ETH’s rally built on a bubble?
2025-07-19 15:03:22

Main Idea
Ethereum's recent price rally is primarily driven by derivatives trading and arbitrage, lacking strong support from real investor participation, making it potentially unstable.
Key Points
1. Ethereum's gains are fueled by leveraged derivatives trading and basis-driven ETF flows, with weak real investor participation.
2. Daily futures and perpetuals trading volumes ($39.5B-$65.3B) vastly overshadow spot volumes (barely above $3B), indicating speculative dominance.
3. ETH ETFs posted a record weekly net inflow of $1.78B, but these flows are driven by short-term strategies rather than long-term conviction.
4. The 30-day Weighted Annualized ETH Basis Return surged to 14%, signaling aggressive arbitrage but also high leverage risks.
5. The rally lacks sustained long-only inflows, genuine investor demand, and real conviction, making it vulnerable to sudden reversals.
Description
Ethereum’s rally is fueled by derivatives and arbitrage, lacking strong spot demand or long-term conviction.
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