In the context of constant volatility in the cryptocurrency market, the Ethereum Foundation (EF) has announced a new fiscal plan that has attracted widespread attention: over the next five years, it will reduce annual operating expenses from the current 15% to 5%, a reduction of up to 66%. Will this conservative yet determined strategy become a new catalyst for boosting the value of Ethereum (ETH)?
In the context of a surge in on-chain assets and subtle changes in market structure, EF's actions undoubtedly add more highlights to the future trajectory of ETH.
Cuts are drastic, liquidity is solid
According to EF's latest disclosed fiscal strategy, the foundation plans to allocate 15% of funds to annual operations over the next two and a half years and linearly reduce this ratio to 5% over five years. Such a significant reduction in expenditure is not uncommon among donation-based non-profit organizations, but it is particularly bold in the crypto space.
The core idea is to ensure sufficient liquidity, ensuring that the foundation has the capital flexibility to continuously support the development of the Ethereum ecosystem. At the same time, the foundation emphasizes a prudent investment strategy to pursue reasonable returns and avoid liquidity risks.
Mlion.ai's on-chain monitoring data indicates that EF currently holds approximately 216,150 ETH, worth over $565 million at current prices, accounting for 99% of its cryptocurrency asset reserves. In addition to cryptocurrency assets, the foundation has allocated approximately $181 million in non-cryptocurrency assets to ensure that the asset portfolio has a certain level of risk hedging capability.
Focusing on DeFi, capital operations become more 'punk'
It is worth noting that EF has not kept all funds static, but plans to enhance capital efficiency by deploying to 'audited, proven, trust-minimized, and composable' DeFi protocols.
EF director Wang Xiaowei pointed out that the foundation's future capital management will prioritize tokenized risk-weighted assets, matched liabilities reserves, and short-term liquid assets. The investment strategy focuses on high liquidity and low systemic risk, emphasizing the 'DeFi punk' values of privacy, decentralization, and self-management.
This strategic transformation means that the foundation will actively utilize on-chain financial tools to achieve capital appreciation without sacrificing asset security and will provide positive support for the Ethereum DeFi ecosystem.
Mlion.ai's DeFi monitoring module shows that the activity of leading DeFi protocols (such as Lido, Aave, and Compound) on the Ethereum network continues to rise, with total value locked (TVL) steadily increasing. If EF can allocate assets reasonably, it may benefit from this in the future.
Corporate strategy shifts, a wave of ETH accumulation emerges
This fiscal reform is not an isolated event. According to on-chain data, as of the end of 2024, institutional accounts have accumulated a total of 981,000 ETH, worth over $2.5 billion. Similar to the corporate accumulation trend faced by Bitcoin in recent years, Ethereum is also undergoing a transformation from retail-driven to institution-led.
The continued involvement of large funds provides solid support for ETH prices. The short-term speculative funds that previously dominated cryptocurrency market sentiment are gradually being replaced by long-term holders, leading to profound changes in market structure.
Mlion.ai's on-chain capital flow monitoring data shows that from May to the present, ETH's actual market capitalization has increased from $240 billion to $247.5 billion, with an additional inflow of $7.5 billion, especially in the range of $2300 to $2800, where the trend of capital accumulation has significantly strengthened.
ETH Price Outlook: Is a Breakthrough Imminent?
The technical aspects also emit positive signals. Analyst Mathew Hyland points out that the ETH price is currently in the historical low range of the Bollinger Bands, with price volatility narrowing to an extreme, and typical trend reversal signals have emerged.
If ETH can successfully break through the current consolidation range, the important psychological barrier of $3000 will become the primary target.
Mlion.ai's quantitative model infers from historical price behavior that once the resistance above $2800 is broken, capital inflow may accelerate further, and Ethereum's market capitalization may be poised for a new round of expansion in the second half of the year.
Summary
The Ethereum Foundation's drastic fiscal measures, reducing operating expenses by 66% coupled with a conservative on-chain DeFi investment strategy, send a strong signal: Ethereum is becoming more robust and resilient. The continuous increase in institutional investment and steady capital inflow also gives ETH price strong breakout potential in the coming months.
For investors, how to identify these underlying trend changes and seize the next big market move is the real key. Relying on Mlion.ai’s on-chain data monitoring, market sentiment analysis, and capital flow tracking can help investors gain insights, make precise layouts, and take an early lead in capturing future profit opportunities.
Disclaimer: The above content is for information sharing only and does not constitute any investment advice!