After several days of market adjustment, the price of ETH has climbed back above $3900. Although it briefly broke through $4000, it could not hold this level. However, this price point contains new market trends.
Looking back over the past year, the development journey of Ethereum has been extremely complex: the success of the Cancun upgrade and the formal approval of the Ethereum spot ETF have laid a new bullish foundation for technology and fundamentals; however, at the same time, Bitcoin, Solana, BNB, and other public chains have broken historical highs, while ETH still hovers around the $4000 mark, reflecting the market's new expectations and challenges for Ethereum.
From this year's ETH price chart, we can see that Ethereum's rise has gone through three key phases, each driven by different market factors:
At the beginning of the year: buoyed by the approval of the Bitcoin spot ETF, market sentiment for Ethereum surged, with prices once breaking through $4100;
May: Ethereum spot ETF approved, but demand falls short of expectations, leading to capital outflow in the market;
November: Trump's victory, warming US policy direction, institutional capital and liquidity returned to the market, leading to the third wave of ETH's rise.
This round of increase is different from the past, with clear signals of institutional entry and improvements in liquidity fundamentals, marking that ETH is entering a new era—the institutional era.
Improvements in liquidity fundamentals: The clarion call for institutional entry
Since December, the inflow of funds into the Ethereum spot ETF has been significant, with net inflows exceeding $2.2 billion for half a month, indicating growing investor interest in ETH. Financial giants like Morgan Stanley, JPMorgan, and Goldman Sachs have not only significantly increased their Bitcoin ETF holdings but have also gradually ventured into Ethereum spot ETFs, indicating a clear consensus among institutional capital on the growth potential of ETH.
Notably, the positioning signals from US pension funds and other low-risk, long-term investors:
These data and dynamics fully demonstrate that institutional capital not only recognizes ETH's role as a 'world computer' but is also gradually participating in ETH staking and ecological construction. The return of institutional funds injects new momentum into the price and ecological development of ETH.
US policy warming: Trump's new crypto policy
US regulatory policies have long been a core variable for the crypto market, and Trump's victory marks a significant reversal in policy direction.
Trump appointed a series of tech and finance giants to key positions, sending a clear signal of relaxed regulation;
Stalled cryptocurrency legislation, such as the Financial Innovation and Technology Act of the 21st Century (FIT21), is expected to be quickly approved, providing regulatory clarity;
The enforcement strategies of the SEC and CFTC will become more collaborative, reducing market panic and litigation risks.
Policy dividends are gradually being released, attracting larger-scale institutional capital to the crypto market, while also providing new recovery opportunities for the Ethereum ecosystem.
DeFi Renaissance: The Ethereum ecosystem welcomes new growth points
The return of institutional funds not only drives the development of Ethereum spot ETFs but also brings a new round of growth opportunities to the DeFi sector.
The supply of stablecoins has reached a historical high, with nearly $25 billion issued within a month after Trump's victory, reaching a total market cap of $202 billion;
Established DeFi projects like Uniswap, Aave, and Lido quickly rebounded in price after policy easing, with TVL (Total Value Locked) and revenue experiencing explosive growth simultaneously;
Capital giants represented by BlackRock have aggressively positioned themselves in RWA (real-world asset tokenization), promoting diversified development of the DeFi ecosystem.
The capital share in the DeFi market remains low, accounting for only 2% of the total cryptocurrency market cap, which means there is significant growth potential for the DeFi sector in the upcoming bull market.
The future of Ethereum: The 'world computer' for institutions
In the past year, with the rise of emerging public chains like Solana, the Ethereum ecosystem faced liquidity outflow and user loss. However, the return of institutional capital and market maturity are reshaping Ethereum's long-term vision.
Ethereum's core advantages lie in:
Security: Ethereum's decentralization and stability make it the preferred choice for institutions;
Compatibility: The compatibility of the EVM ecosystem can meet the needs of different developers and enterprises;
Scarcity of block resources: In the long term, the actual demand for Ethereum block resources will gradually increase, driving the value of ETH.
The strategic direction for Ethereum's future is becoming increasingly clear: just as Bitcoin is positioned as 'digital gold,' and Solana as the 'on-chain Nasdaq,' Ethereum must focus on its 'world computer' guiding star goal. Only by clarifying this goal can Ethereum continue to lead the development of the decentralized economy.
Over the past decade, Ethereum has successfully established its core position in the crypto market through smart contracts and the DeFi ecosystem. In the next decade, the push from institutional funds and policy dividends will bring new growth momentum to Ethereum. From spot ETFs, DeFi resurgence to RWA sector explosion, ETH is not only a core choice for institutional capital but will also play an increasingly important role in the global financial system.
The future of Ethereum is becoming clear: it will be the 'world computer' for global capital and innovation, ushering in the next prosperous era of the crypto economy.
