Bernstein: The three major factors driving the rise of ETH are stablecoins and tokenization craze, Layer 2 institutionalization, and ETH short position squaring

According to The Block, Ethereum has underperformed overall during the period, but its price has suddenly rallied 65% in the last 30 days and is up nearly 100% since its April lows. Bernstein's analysts outlined three factors behind the rally: stablecoins and tokenization craze, Layer 2 institutionalization, and ETH short position squaring.
Analysts say the cycle is expanding beyond store-of-value use cases to refocus on the underlying blockchain, and Ethereum, which accounts for 51% of the total stablecoin supply, is emerging as a key platform representative of this growth trend. Traditional financial giants such as BlackRock and Franklin Templeton are also pushing ahead with the adoption of the real-world asset tokenization market, which is currently worth more than $22 billion, while Ethereum is once again dominating. Additionally, Ethereum Layer 2 is playing an increasingly important role in institutional crypto infrastructure. The third driver of ETH's recent outperformance is more tactical. Over the past 12 to 18 months, crypto hedge funds have often used ETH as a delta neutral hedge - going long BTC and SOL while shorting ETH. But as the market narrative shifts towards institutional adoption of blockchain and stablecoin payments, and uses beyond its store-of-value function, the justification for ETH's underperformance is increasingly difficult to justify, they say.