Ethereum, as a shining star in the blockchain field, has been continuously leading the industry's innovation and development since its inception. In 2025, Ethereum stands at a new historical starting point, with numerous favorable factors converging, like a powerful engine driving Ethereum towards a more glorious future, ushering in a golden age filled with infinite possibilities.
First, regulatory easing: policy green lights illuminate the way forward
1. SEC attitude makes a 180° turn
The U.S. Securities and Exchange Commission (SEC) once had an attitude like the sword of Damocles hanging over Ethereum, making the entire industry tremble. However, the appointment of new chairman Paul Atkins has brought a significant turnaround. He decisively withdrew the previous chairman Gensler's suppression policies on DeFi and clearly stated that ETH is not a security. This shift is like seeing the light through the clouds, clearing a significant barrier to Ethereum's development. Previously, due to regulatory uncertainty, many developers and investors stayed away from Ethereum; now this concern has been dispelled, allowing developers to innovate and develop on the Ethereum platform with greater peace of mind.
2. (GENIUS Act) implementation reshapes stablecoin landscape
The implementation of the (GENIUS Act) establishes a clear framework for stablecoin regulation, requiring stablecoins to have 100% reserve backing. This regulation, while seemingly strict, presents a tremendous opportunity for Ethereum. With its high level of security, stability, and wide-ranging ecological applications, Ethereum has become the core settlement layer for compliant stablecoins such as USDC and PYUSD. The market share of stablecoins on the Ethereum main chain is expected to expand further, resulting in a corresponding increase in daily Gas consumption, directly driving ETH deflation. A massive influx of funds into the Ethereum ecosystem has triggered explosive growth in on-chain dollar liquidity, injecting strong momentum into the prosperity of the Ethereum ecosystem.
3. (CLARITY Act) promotes, institutions face no obstacles to entry
(CLARITY Act) steady progress clarifies ETH as a 'digital commodity' regulated by the U.S. Commodity Futures Trading Commission (CFTC), eliminating the SEC's retrospective risk and clearing the last hurdle for institutional investors to enter en masse. Previously, institutional investors were cautious about investing in Ethereum due to regulatory risks. Now, with the gradual clarification of regulations, financial giants like BlackRock and Fidelity are significantly increasing their holdings of Ethereum through ETFs. The net inflow of Ethereum spot ETFs exceeded $210 million in a single day, and institutional holdings continue to rise, reaching a new high for 2025. A large amount of ETH has been locked, further exacerbating the supply-demand imbalance of ETH in the market and pushing prices up.
Second, technological breakthroughs: Weekly MA200 supports the resumption of the bull market
1. Key signals emerge, 'bull flag' pattern begins to form
From a technical analysis perspective, ETH has successfully stabilized above the 200-week moving average (2500 USD), a key event of great significance. In the field of technical analysis, the 200-week moving average is seen as an important indicator of the long-term trend of the market. The ability of ETH to stabilize above this level indicates strong bullish momentum, providing robust support for a long-term upward trend. Meanwhile, the price action of ETH has formed a 'bull flag' pattern, a classic continuation pattern that suggests prices will continue to break upwards after a period of consolidation, with the target eyeing above $3000, laying a solid technical foundation for the resumption of the bull market.
2. Momentum indicators strengthen, market enthusiasm surges
The MACD indicator has shown a golden cross, an important signal of the strengthening bullish momentum in the market. The MACD indicator effectively assesses market trends by analyzing the differences between short-term and long-term moving averages. The appearance of a golden cross indicates that the short-term moving average crosses above the long-term moving average, suggesting that bullish momentum prevails in the short term and that this advantage is likely to continue. The Relative Strength Index (RSI) has broken above 60, entering a strong zone, indicating strong buying power in the market and heightened enthusiasm among investors for Ethereum. Additionally, the surge in open interest in futures has intensified the pressure on shorts, forcing many shorts to cover during the market's upward movement, further boosting ETH prices and forming a virtuous cycle.
Third, Pectra upgrade: performance leap and lower institutional thresholds
1. Validator staking limit raised, institutions actively increasing holdings
The Pectra upgrade has significantly raised the validator staking limit from its previous level to 2048 ETH. This move is highly attractive to institutional investors. Institutions like Fidelity and BlackRock increased their holdings by 100,000 ETH within a week after the upgrade was completed. As a result, the total amount staked has surpassed 22 million ETH, with a large number of ETH locked in the staking process, reducing the circulating supply in the market. For institutional investors, a higher staking limit means they can participate more effectively in the validation and governance of the Ethereum network while also earning corresponding staking rewards, further enhancing Ethereum's appeal to institutional investors.
2. TPS significantly increased, Gas fees markedly reduced
Through the optimization of sharding technology via EIP-7691, Ethereum's transaction processing speed (TPS) has seen a qualitative leap, increasing to 60. Simultaneously, Gas fees have decreased by 60%, a change that has profound implications for the Ethereum ecosystem. Higher TPS means Ethereum can handle more transactions, meeting the growing user demand. The reduction in Gas fees significantly lowers the cost for users conducting transactions on the Ethereum network, whether in decentralized finance (DeFi) applications for lending, trading, or in non-fungible token (NFT) minting and trading operations, users no longer need to worry about high transaction fees. This not only enhances user experience but also attracts more users and developers to the Ethereum ecosystem, especially those sensitive to transaction costs, such as small transaction users and emerging project developers. Furthermore, researcher Dankrad Feist proposed that according to the current technological development trend, within four years, the Gas Limit may increase 100-fold, and the theoretical TPS could reach 2000. If this ambitious goal is achieved, Ethereum will have stronger processing capabilities, able to support more complex application scenarios, further solidifying its leading position in the blockchain field.
Fourth, the Federal Reserve's turn: macro benefits boost Ethereum
1. Downward interest rates highlight the advantages of 'digital treasury bonds'
The Federal Reserve's shift in monetary policy has profound effects on the cryptocurrency market. It is expected that by 2026, the Federal Reserve's interest rates will drop to 3.25%. In traditional financial markets, a decline in interest rates means lower yields on fixed-income assets such as bonds. Ethereum's staking yield currently remains around 3.5%, highlighting its yield advantage. As a digital asset with unique value, Ethereum is gradually becoming a 'digital treasury bond' alternative in a macro environment of declining interest rates. More and more investors are shifting funds from the traditional bond market to the Ethereum staking space in pursuit of higher returns, bringing a large influx of funds into the Ethereum market.
2. Weaker dollar makes inflation-resistant assets popular
As the Federal Reserve's monetary policy becomes more accommodative, expectations for a weaker dollar have increased. In the context of an unstable global economic environment, investors are increasingly seeking inflation-resistant assets to preserve and grow their wealth. Ethereum, with its characteristics of decentralization and limited supply, is viewed by the market as an effective inflation hedge. When the dollar depreciates, the price of Ethereum, priced in dollars, often rises, allowing investors to effectively counter the risks of asset depreciation brought on by inflation. This anti-inflation property has attracted significant attention and capital inflow from investors worldwide, further driving up the price of Ethereum.
Fifth, staking economy: innovative models and market tightening
1. On-chain staking rate rises, innovative strategies emerge
Currently, the staking rate on the Ethereum chain has reached 28%. Protocols like Lido and Ether.Fi are actively innovating, introducing circular lending strategies. In this innovative model, users staking ETH can not only earn staking rewards but also utilize the staked ETH through circular lending to obtain additional liquidity. This strategy has attracted more users to participate in ETH staking, further increasing the staking rate. By staking ETH, users can not only contribute to the security and stability of the Ethereum network but also earn considerable annualized returns without affecting asset usage; currently, the annualized return on staked ETH can reach 3-4%. This innovative staking model has made Ethereum's staking economy more prosperous and provided users with more investment choices.
2. Staking ETF approaching, long-term funds waiting to enter
The U.S. Securities and Exchange Commission (SEC) is expected to approve Ethereum staking ETFs by the end of 2025. This move will have profound effects on the Ethereum market. The launch of staking ETFs will provide convenient channels for long-term funds, such as retirement accounts, to invest in the Ethereum staking market. Previously, long-term funds like retirement accounts faced strict investment restrictions and found it difficult to participate directly in Ethereum staking. The emergence of staking ETFs allows these long-term funds to indirectly participate in Ethereum staking by purchasing ETFs, sharing in staking rewards. This will attract a large influx of long-term funds into the Ethereum market, further tightening market liquidity and pushing Ethereum prices up. At the same time, the stable inflow of long-term funds will also enhance the stability of the Ethereum market and boost market confidence in Ethereum.
Sixth, L2 ecosystem explosion: giants entering trigger chain reactions
1. Enterprise-level L2 chains are emerging
Sony has launched the gaming chain Soneium based on OP Stack, while Robinhood has built an on-chain U.S. stock trading platform on Arbitrum. The emergence of these enterprise-level L2 chains marks a new development stage for the Ethereum Layer 2 ecosystem. Sony, as a globally recognized tech and entertainment giant, will bring a large number of gaming users and developer resources to Ethereum. The Soneium gaming chain, based on Ethereum Layer 2 technology, enables efficient and low-cost in-game transactions and asset circulation, providing players with a smoother gaming experience. Robinhood, as a well-known financial trading platform, building on-chain U.S. stock trading on Arbitrum closely connects traditional financial markets with the Ethereum ecosystem, offering investors a new investment channel and bringing more financial resources and user traffic to the Ethereum ecosystem.
2. Data shines, ecosystem develops collaboratively
The Base chain, as an important member of the Ethereum Layer 2 ecosystem, has performed exceptionally well. Its daily average transactions have reached 6 million, accounting for 60% of total L2 transaction volume. Base chain attracts a large number of users and projects through its efficient transaction processing capability and excellent user experience. The fee income not only provides financial support for the Base chain's development but also feeds back into the Ethereum mainnet, promoting the collaborative development of the entire Ethereum ecosystem. Various DeFi applications, NFT projects, and more are flourishing on the Base chain, allowing users to lend, trade, mint NFTs, and more on-chain, enjoying efficient and low-cost services. This prosperous ecological landscape attracts more developers and users to pay attention to the Ethereum Layer 2 ecosystem, forming a virtuous cycle.
Seventh, celebrity effect and regional policy support
1. Trump family enters the game, attracting market attention
The Trump family invested $48 million in ETH and launched the WLFI project, aimed at promoting 'DeFi democratization'. The Trump family's high profile and influence globally have attracted widespread market attention. Many investors, influenced by the celebrity effect, have begun to focus on Ethereum and the DeFi space. This not only brings new capital inflows to the Ethereum market but also raises Ethereum's visibility and recognition in mainstream society. The Trump family's involvement has made more people aware of the potential of Ethereum and DeFi, attracting more investors and developers into the field, further promoting the development of the Ethereum ecosystem.
2. Hong Kong policy relaxation expands development space
Hong Kong accepts ETH as proof of immigration assets and supports compliant ETF staking. This policy relaxation provides a broad space for Ethereum's development in Asia. As an international financial center, Hong Kong has a complete financial infrastructure and abundant financial resources. The inclusion of ETH as proof of immigration assets enhances Ethereum's recognition and acceptance among high-net-worth individuals. At the same time, the implementation of compliant ETF staking policies provides investors with more investment strategy choices, further invigorating the Ethereum market. This policy has attracted the attention of many investors in Asia towards Ethereum, promoting its popularity and application in the region.
Eighth, institutional giants join forces with Ethereum
1. PayPal and Visa lead payment transformation
PayPal issues ETH stablecoin PYUSD, while Visa settles using USDC. The actions of these two payment giants mark a significant breakthrough for Ethereum's application in the payment field. PayPal, as a leading online payment platform, has a vast user base. Its issuance of the PYUSD stablecoin allows users to conveniently use Ethereum-related assets for payments on the PayPal platform, expanding Ethereum's application scenarios into daily consumption. Visa, as a leader in the global payment industry, adopting USDC for settlements, further promotes Ethereum's application in traditional payment fields. The entry of these two payment giants not only enhances the payment convenience of Ethereum but also boosts market confidence in Ethereum, attracting more merchants and users to accept Ethereum as a payment method.
2. Deutsche Bank explores new areas of on-chain bonds
Deutsche Bank issues on-chain bonds, an innovative move that opens new directions for Ethereum's application in finance. The on-chain bonds are based on Ethereum blockchain technology, offering higher transparency, security, and liquidity. By issuing on-chain bonds, Deutsche Bank can finance more efficiently, and investors can participate in bond investments more conveniently. This innovative application showcases Ethereum's strong potential in the financial sector, providing a reference for other financial institutions. In the future, as more financial institutions develop innovative businesses on Ethereum, Ethereum will gradually become the underlying infrastructure of global digital finance.
Ninth, technological route innovation and governance upgrades
1. Vitalik strongly promotes new architecture, performance set to leap
Ethereum founder Vitalik Buterin strongly promotes the ZK-EVM + RISC-V architecture. This new technological route aims to enhance Ethereum's performance. ZK-EVM (Zero-Knowledge Proof Virtual Machine) improves privacy and scalability, achieving efficient transaction validation and processing without disclosing transaction information through zero-knowledge proof technology. RISC-V, as an open-source instruction set architecture, is better compatible with modern hardware acceleration technologies, significantly improving the execution efficiency of smart contracts. It is expected that in the future, adopting this architecture will enhance Ethereum's efficiency by 50-100 times. This will bring more application scenarios to the Ethereum ecosystem, such as high-frequency trading, real-time gaming, AI inference, etc., meeting the needs of different user groups and further solidifying Ethereum's leading position in the blockchain field.
2. Ethereum Foundation restructured, connecting with Wall Street
The Ethereum Foundation has undergone restructuring, adopting a dual-layer structure and establishing a new organization, Etherealize, to connect with Wall Street. This governance upgrade aims to strengthen communication and cooperation between Ethereum and traditional financial institutions. By connecting with Wall Street, Ethereum can attract more traditional financial resources and professional talent, enhancing its influence in the financial market. At the same time, the establishment of a dual-layer structure makes the governance of the Ethereum Foundation more efficient and transparent, enabling better coordination of community resources and promoting the development of the Ethereum ecosystem. This move marks an important step for Ethereum on the path toward compliance and internationalization, helping it occupy a more significant position in the global financial market.
Tenth, deflation and supply-demand imbalance: the intrinsic driving force for price increase
1. EIP-1559 continues to drive, deflation becomes the norm
Since the implementation of EIP-1559, 4.6 million ETH have been burned. During periods of high activity on the Ethereum network, the annual inflation rate even dropped to -1%, making deflation the norm. EIP-1559 introduced a base fee mechanism that directly burns a portion of transaction fees, reducing the circulating supply of ETH. As the Ethereum ecosystem continues to develop and transaction activity on the network increases, the amount of ETH burned continues to rise. This deflationary mechanism enhances the scarcity of ETH, and according to the principles of supply and demand, a reduction in supply with unchanged or increasing demand will push prices up. The deflationary mechanism not only supports ETH's price but also strengthens investor confidence in long-term investments in ETH.
2. Supply-demand imbalance intensifies, price increase is expected
Currently, 28% of ETH is staked, with a large amount of ETH locked in the staking process, reducing the circulating supply in the market. At the same time, ETF funds continue to flow in, increasing the demand for ETH. On one hand, institutional investors are significantly increasing their holdings of ETH through ETFs, driving up market demand. On the other hand, as the Ethereum ecosystem continues to improve, an increasing number of application scenarios are generating demand for ETH, such as lending and trading in DeFi applications, and minting and trading in NFT projects. With reduced supply and increased demand, the supply-demand imbalance of ETH is intensifying, which will create strong upward pressure on ETH prices. From a market perspective, supply-demand imbalances are often important factors driving asset price increases; therefore, in this context, an increase in ETH prices is expected.
Factors such as regulatory easing, technological iteration, institutional allocation, and macroeconomic benefits have formed a powerful 'four-wheel drive' that propels Ethereum's glamorous upgrade from 'public chain leader' to 'global digital financial infrastructure'. In the short term, Ethereum's price is expected to break the $3000 resistance level and move towards higher targets; in the medium to long term, its price target is between $5000 and $15000. Ethereum is currently in a golden age filled with infinite opportunities, and let us wait and witness its continued brilliance in the blockchain field.
