Institutional Investors Boost Ethereum Futures Amid Price Concerns

NEW YORK, March 29, 2025 — Institutional investors are increasingly eyeing Ethereum as a potential buying opportunity, despite its recent struggles in the cryptocurrency market. With a current price of $2,068, many in the financial sector believe the digital asset is fundamentally undervalued.

Reports from the Commodity Futures Trading Commission (CFTC) indicate a significant presence of institutional traders in Ethereum futures. Since 2023, the number of firms holding long positions in Ethereum futures has steadily increased, rising from 38 firms this year compared to an average of 74 engaged in Bitcoin futures. This trend suggests a strategic response to price fluctuations coveted by institutional investors.

The latest Commitment of Traders report dated March 25 reveals that smart money appears to view Ethereum as oversold, prompting increases in long positions for two of the past three weeks. With Bitcoin’s enduring success pushing its price over $82,000, Ethereum has struggled, showing a 32% decline over the past three years. Nevertheless, some institutional analyses forecast an imminent price rise for Ethereum, predicting a move toward $2,400 — a potential increase of 22%.

The underperformance of Ethereum compared to Bitcoin can be attributed to ongoing dissatisfaction within the community regarding the Ethereum Foundation’s development strategy. Developers have called for quicker transaction speeds and lower fees, while the Foundation has focused on research-oriented projects that prioritize security, privacy, and decentralization.

Rob Hadick, a general partner at Dragonfly, voiced concerns about Ethereum’s relatively weak performance against competitors like Bitcoin and Solana. ‘The market is concerned about value accrual and protocol revenue, especially since Layer 2 solutions are perceived as parasitic to Layer 1 chains,’ he said, underscoring the lack of confidence in the Ethereum Foundation’s timelines for significant upgrades.

Nevertheless, Hadick also highlights the strengths of Ethereum, noting its significant total value locked (TVL), stablecoins, and real-world assets (RWAs) associated with the network. ‘There is potential for Ethereum to spur more economic activity and reverse the downward trend,’ he stated. ‘But the time is now.’

The CFTC’s report does not disclose specific trading firms but identifies active participant groups. Recently, dealer firms—the swap dealers linked to futures and commodities—have drastically increased their Ethereum futures contracts by 336%, growing from 3,500 contracts last November to over 15,000 today. Their rise points to a robust belief that Ethereum’s price will recover in the near future.

Meanwhile, leveraged firms known for utilizing liquidity strategies remain the dominant sellers of these futures to dealer counterparts. Following the election of President Trump, there has been heightened interest in cryptocurrency, reflected in continued growth of Ethereum futures contracts.

This trend, coupled with the influx of over 11,800 futures contracts last year and an additional 2,700 contracts year-to-date, indicates a substantial commitment from institutional investors toward Ethereum. Analysts suggest that these players are preparing for a resurgence in demand and appreciating the currently depressed prices.