Ethereum (ETH), which has been performing poorly against Bitcoin (BTC) for months, made an unexpected breakout in the last week. While Ethereum moved the market with its tremendous performance, Bernstein analysts listed three main factors behind the ETH rally. Bernstein analysts led by Gautam Chhugani noted that the Ethereum rally was fueled by stablecoins, institutional adoption, and short liquidations. Analysts said the recent bull cycle has expanded beyond store of value use cases, with stablecoin payments and tokenized securities gaining real momentum. At this point, analysts noted that Ethereum holds 51% of the total stablecoin supply and has emerged as the underlying platform for this growth trend. Bernstein analysts said Ethereum is taking on an increasing role in Layer 2 enterprise crypto infrastructure, with networks like Base, the latter of which was launched by Coinbase, generating around $84 million in revenue last year. “As Layer 2s like Base use ETH for gas and payments, it helps drive demand for Ethereum and positions it as a leading platform for enterprise smart contract adoption.” Analysts recently stated that institutional investors who were long in Bitcoin and Solana and short in Ethereum have now started to turn to ETH with the increasing use of ETH. *This is not investment advice.