In the past month, Ethereum has broken the previous downturn and has been "abnormally" strong. Against the backdrop of still quiet on-chain activities and continued inflation, Ethereum has experienced a strong second wave of gains. Jason, an analyst at StarEx Exchange, believes that the core driving force behind this wave of gains is capital.
Looking back, the trend of ETH is often highly correlated with the activity and application popularity on the chain. However, the recent rise happened at a time when the on-chain data was "lifeless": low transaction volume, slow user growth, and inflationary pressure. In addition to the Ethereum Foundation's announcement that it will focus on practical applications, there is no significant positive news for the ecosystem itself. But ETFs continue to flow in, and institutions prefer ETH. In the past month, ETH-related spot ETFs have shown a continuous net inflow trend, while Bitcoin ETFs have been relatively weak. Even BlackRock has quietly reduced its holdings of some Bitcoin ETFs and increased its holdings of ETH-related products.
Jason, an analyst at StarEx Exchange, believes that this rotation reflects the re-evaluation of the risk-return ratio by funds, and ETH may be more cost-effective than BTC at this stage. In addition, more and more US-listed companies have also begun to get involved in Ethereum, increasing their company valuations by purchasing ETH or deploying enterprise-level staking services. The "Ethereum version of micro-strategy" is quietly taking place on Wall Street.
In the past few years, institutions have bet on early altcoin projects through the VC model and made huge profits in the secondary market. However, with the weakening of the ecosystem, the serious homogeneity of altcoin projects, and the depletion of incremental users, this model is unsustainable. Today, the strategy of institutions has shifted from "coin investment circle" to "packaging crypto assets into traditional markets", and cutting leeks in the US stock market through tools such as corporate financial reports and ETFs. ETH has become the first choice for institutional layout due to its good compliance prospects and technical maturity.
In terms of policy, the recent US regulatory environment has sent a series of positive signals to Ethereum: the Stablecoin Act was passed, and Treasury Secretary Bessant said that stablecoins have a potential of 2 trillion US dollars and regarded them as new buyers of US debt; Circle was successfully listed, its market value soared, and the capital market responded enthusiastically; the SEC softened its attitude and made it clear that PoS staking, node operation and staking as a service do not constitute securities issuance; it is studying the "innovation exemption" mechanism to open up a legalization path for DeFi and on-chain finance.
All these indicate that the legitimacy and compliance of Ethereum as an on-chain financial infrastructure is being steadily established.
RWA (real world asset tokenization) is becoming the focus of institutional attention. From bonds, funds to clearing and settlement systems, traditional financial assets are gradually being put on the chain. The question is: who will carry these huge assets? Although Bitcoin has the attributes of "digital gold", it cannot carry complex contracts; SOL has a prosperous ecosystem but the "casino" label is too heavy to gain the trust of Wall Street; Ethereum has a mature, secure and scalable smart contract platform, which is naturally the preferred infrastructure for the implementation of RWA.
Jason, an analyst at StarEx Exchange, believes that ETH is becoming the "main on-chain financial platform" of Wall Street, and this trend may determine the future of the entire crypto industry. In the current context of the continued expansion of the US fiscal deficit, the ineffectiveness of interest rate hikes, and the debt growth rate exceeding the growth of private credit, traditional finance is facing an institutional dilemma. Gold and Bitcoin can no longer completely hedge systemic risks.
The crypto world is also experiencing a narrative shift—from Bitcoin’s “monetary attributes” to Ethereum’s “institutional attributes” and “financial infrastructure functions.”
This is the inevitable logic of the evolution of the bull market: capital flows, regulatory environment, technical narratives, and institutional allocations are all turning to Ethereum. Even if the market rhythm is unpredictable, in the short term, the continued increase in ETFs and institutional funds is enough to support ETH to remain relatively strong. The long-term trend depends on whether Wall Street can really promote the large-scale implementation of RWA on Ethereum. It is worth noting that this round of rise is different from the previous bull market. Other projects in the ETH ecosystem have performed weakly, and L2 and EVM-compatible chains have not seen obvious hype, indicating that the focus of the main uptrend is on ETH itself and mainstream funds. Jason, an analyst at StarEx Exchange, believes that this bull market should keep an eye on funds and institutions. Following the funds, ETH is a safer choice.
