tl;dr
Ethereum saw significant gains in Q2 driven by $1.7 billion in inflows into US-traded spot ETFs, a 7% increase in layer-2 throughput, a 39% drop in average user fees, and an 8% rise in liquid supply. The share of ETH held at a profit rose from under 40% to nearly 90%, with total value locked reachin...
Ethereum (ETH) demonstrated notable gains in the second quarter, driven by increased exchange-traded fund (ETF) inflows, enhanced layer-2 activity, and improved liquidity, setting a positive tone for the third quarter. US-traded spot Ethereum ETFs attracted $1.7 billion in net inflows, reversing prior outflows and signaling renewed institutional confidence. Layer-2 throughput rose by 7%, coupled with a 39% drop in average user fees, while liquid supply expanded by 8%, and long-dormant balances declined by 6%, reflecting a dynamic and active ecosystem.
These factors contributed to a surge in the share of ETH held at a profit, which climbed from below 40% to nearly 90%. Ethereum's total value locked (TVL) reached $63.2 billion, underscoring its strong presence in decentralized finance (DeFi). Derivatives markets also showed vigorous activity, with daily perpetual futures turnover averaging $51.4 billion—a 56% increase quarter-over-quarter—and futures open interest at $14.5 billion, despite a slight pullback, indicating robust liquidity. Options open interest rose to $5.3 billion, and term-futures volume increased by 11%, reflecting heightened hedging demand.
Network economics improved as developers and users benefited from a 39% reduction in base layer fees owing to increased rollup transactions, facilitating more cost-effective on-chain applications. Ethereum maintained a modest inflation rate near 0.75% annualized, mitigating long-term supply pressures. Staked ETH values continued to grow, accompanied by stable annual yields, reinforcing the platform's staking appeal. On-chain analytics revealed strategic repositioning by holders during the price recovery, with liquid coins rising 8% and long-held coins falling 6%, indicating measured profit-taking rather than panic selling. Net Unrealized Profit/Loss swung from capitulation to optimism, tracking positive shifts in market sentiment as the pool of underwater coins shrank dramatically.
Within DeFi, Ethereum's $63 billion TVL spanned lending, decentralized exchanges, and yield farming, highlighting its diversified use cases. ETH's market capitalization share grew alongside Bitcoin and Solana amid investor rotation toward blue-chip assets. Perpetual swap funding rates remained neutral to positive, suggesting balanced speculative activity. However, sustaining these gains will require continued ETF inflows and low transaction fees. Entering the third quarter, Ethereum benefits from stronger institutional backing, reduced costs, and a healthier on-chain profit landscape, positioning it well for future growth.