With the passage of the GENIUS Act, which provides the first clear regulatory framework for stablecoins in the United States, this financial category is expected to see massive expansion.
As most stablecoins are built on the Ethereum network, ETH is well-positioned to lead the next wave of adoption. Additionally, the Dencun upgrade, which reduced transaction fees on subnetworks (Layer-2), and the beginning of institutional inflows via ETF boxes, may make Ethereum the biggest winner in this bull market, even if Bitcoin remains king in terms of market capitalization.
1) Regulated Stablecoins: Green Light for Expansion
GENIUS Act (July 2025): Considered the first U.S. law regulating stablecoins for payments, it mandates 1:1 dollar backing and places them under banking and anti-money laundering laws. This law also prohibits interest payments to stablecoin holders merely for holding them, which may drive capital seeking returns into engaging in DeFi activities.
Result: Banks and companies will now be able to issue legally compliant stablecoins, often choosing the Ethereum network and its infrastructure.
2) Dencun Upgrade: Reducing costs where users need it
Dencun Upgrade (March 2024): Launched blob technology that significantly reduced data costs on Layer-2 networks like Arbitrum, Base, and Optimism.
This means that transfers, payments, and trading on Layer 2 have become much cheaper, opening the door for widespread use by consumers and institutions.
3) Institutions Open Their Doors to Ethereum
ETF boxes for ETH: Since July 2025, there have been significant inflows, and on some days, they exceeded Bitcoin inflows.
"Summer of Stablecoins": Major media reports have predicted that the adoption of regulated stablecoins could drive Ethereum to test or even exceed its previous all-time high of $4,800, this time supported by real usage rather than just speculation.
4) Network Effect: Developers, Liquidity, and L2 Flexibility
Ethereum still possesses:
• The deepest liquidity in DeFi
• Largest Developer Community
• Multi-Subnet Architecture with Unified Security
This combination makes it the top choice for adopting stablecoins, real-world assets (RWA), and global payments.
Will Ethereum surpass Bitcoin?
In terms of activity and adoption: yes, the likelihood is strong. New laws for stablecoins, reduced Layer-2 fees, and institutional ETF inflows place ETH in an ideal position to lead a wave of adoption.
In terms of market capitalization: it's harder. Bitcoin still enjoys the image of "digital gold" and the global macro asset, giving it an advantage in maintaining its lead.
Challenges Facing Ethereum:
• Competition: Chains like Solana may attract some users due to their speed and low fees.
• GENIUS Act Restrictions: Prohibiting interest payments on stablecoins may limit their appeal to traditional investors.
• User Experience: The challenge remains to unify and simplify the Layer-2 experience for the average user.
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Summary:
Ethereum is a strong candidate to lead in 2025 in terms of activity and adoption, thanks to the clarity of stablecoin regulations, low Layer-2 costs post-Dencun, and institutional inflows. However, Bitcoin remains king in terms of market dominance and its role as a global reserve asset.
Disclaimer: This is not investment advice. Cryptocurrencies are high-risk assets and can lead to a complete loss of capital. It is advised to conduct your own research before making any decisions.
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