Since the launch of Ethereum in 2015, its vision has been to serve as the infrastructure for the entire digital economy. However, the market still prices it with a perspective comparing it to high-risk technology stocks. This paradox explains why top Ethereum developers and investors describe the currency as 'priced significantly below its actual value' despite it being behind most of the economically viable blockchain activities.
Today, most of the digital dollar, including USDT, is produced on Ethereum; over 70% of real-world assets converted into tokens—such as treasury bonds and gold—are minted and recorded on the Ethereum network through its smart contracts. The network also secures nearly $770 billion in decentralized finance applications. This volume is not just a marketing figure; it is a testament to the confidence that Ethereum is a comprehensive digital transformation that will create a lasting and increasing demand for the original currency itself.
The latest update to Ethereum has changed the game as a fixed portion of transaction fees is burned forever, while the new issuance protocol caps annual inflation at 1.5%. Net inflation has dropped to nearly zero, and it even turned negative during periods of network congestion. This means that Ethereum becomes scarcer as usage increases, unlike traditional currencies whose supply increases with growing demand.
This programmed scarcity is coupled with a second feature, which is the storage yield. The holder of the currency can deposit it and receive an annual yield of about 3%. In practice, you own a rare asset that rewards you with interest that recycles its purchasing power internally. In comparison, short-term U.S. treasury bonds may provide a similar yield before inflation; however, after accounting for inflation, the real yield of Ethereum remains higher, often without credit risk or central intervention.
In terms of institutional adoption, Ethereum spot ETFs received the green light in the United States last year, attracting hundreds of millions monthly, even though they cannot yet store the currency directly within the fund. Analysts expect that allowing storage will open the door to billions of new stable capital. At the same time, Joe Lubin, one of the founders of Ethereum, created the 'Strategic Ethereum Reserve,' which purchased nearly two billion dollars to serve as an emergency liquidity reservoir on-chain. These steps are transforming the currency from a speculative tool to a reserve asset that is recorded on the books of banks and investment firms just as short-term bonds or gold holdings are recorded.
Ultimately, what is happening now resembles a phase when oil was priced as an alternative to coal before an entire industrial civilization was built upon it. An investor who views Ethereum merely as a technical token misses the bigger picture: a rare currency with tangible returns, burning itself to fuel demand, and protecting a digital economy that doubles in size annually. The question facing every investment entity is not whether this price divergence will close, but when and at what speed. And when institutions begin to treat Ethereum as a reserve asset, will the individual trader be proactive, or will they wait until consensus is certain and the price margin disappears?