Ethereum News Update: Institutional Investors Acquire 3% of Ethereum’s Total Supply While Valuation Models Indicate a 57% Undervaluation

Ethereum Maintains Strength Above $2,900 Amid Institutional Inflows

Ethereum has managed to stay above the $2,900 mark, buoyed by significant net inflows totaling $96.67 million into U.S. spot ETFs on November 24. Notably, BlackRock’s ETF accounted for $92.6 million of this amount, marking its first positive inflow in two weeks and breaking an eight-day streak of outflows.

Institutional players, including BitMine Immersion Technologies (NYSE: BMNR), have been actively accumulating Ethereum. The company recently acquired 69,822 ETH, valued at over $200 million, bringing its total holdings to 3.63 million ETH—approximately 3% of the total Ethereum supply. Led by Fundstrat’s Tom Lee, BitMine Immersion has adopted a strategy of purchasing during market dips, reflecting Lee’s optimistic outlook that Ethereum is entering a “supercycle” fueled by the expansion of stablecoins, tokenization of real-world assets, and increased institutional participation.

Valuation Models Suggest Ethereum Is Undervalued

Simon Kim, founder of venture capital firm Hashed, has highlighted Ethereum’s potential undervaluation using a real-time dashboard that compiles eight different valuation models. According to this tool, Ethereum’s fair value is estimated at $4,747.40, suggesting it is currently undervalued by 56.9% compared to its market price of $3,022.30.

The dashboard incorporates both traditional financial metrics—such as discounted cash flow (DCF) and price-to-earnings (P/E) ratios—and crypto-specific models like Metcalfe’s Law and Total Value Locked (TVL) multiples. The DCF model points to a 200% undervaluation at $9,067.80, while Metcalfe’s Law estimates a 217% undervaluation at $9,583.60. In contrast, the P/E ratio model indicates Ethereum is 70.2% overvalued at $899.20. When weighted by model reliability, the composite fair value produces five “buy” signals, one “hold,” and two “sell” recommendations, highlighting the challenges of valuing emerging digital assets.

Layer-2 Networks Drive Ecosystem Growth

Ethereum’s network continues to expand, with Layer-2 solutions now handling 58.5% of all transactions within the ecosystem.

The surge in Layer-2 activity—led by platforms such as Arbitrum, Optimism, and Base—has resulted in lower transaction fees and increased network capacity, positioning Ethereum as a scalable foundation for decentralized applications. This momentum is expected to accelerate with the upcoming Fusaka upgrade, scheduled for December 3, 2025, which aims to further improve rollup efficiency. Analysts observe that, despite Ethereum’s price consolidating near $3,078, strong fundamentals—including higher staking rewards, growing developer engagement, and a 36.7% year-over-year increase in Layer-2 TVL to $43.3 billion—could set the stage for a significant price movement.

Mixed Market Signals and Future Outlook

Market conditions remain uncertain. Expectations for a Federal Reserve rate cut at the December meeting have risen above 80%, boosting investor confidence. However, Ethereum futures experienced net outflows of $4.31 billion over the past week, though the last three days saw inflows of $735.46 million. Short positions worth $51.3 million were liquidated in the past 24 hours, indicating a cautious market stance. Despite these factors, Ethereum’s market capitalization stands at $365.4 billion, still 38.8% below its record high of $4,946.10.

Analyst Predictions and Industry Developments

Experts such as Tom Lee and Fundstrat’s Mark Newton foresee a rebound in Ethereum’s price, with Lee projecting a year-end target of $7,500 and a long-term goal of $60,000 by 2030. These forecasts depend on macroeconomic trends, including the potential impact of the GENIUS Act on stablecoin adoption and upcoming network upgrades like Fusaka. Additionally, Grayscale’s recent introduction of a spot Dogecoin ETF (GDOG) on NYSE Arca underscores the increasing integration of cryptocurrencies into mainstream finance—a development that could further enhance Ethereum’s appeal to institutional investors.