Grayscale Signals Ethereum’s Institutional Growth as Top Traders Revisit Market Potential

While Bitcoin and Solana have surged to new all-time highs, Ethereum remains notably behind. Despite its historical peak of $4,892, Ethereum is still trading well below that level, with its highest price in 2024 reaching only around $4,100. As of the time of writing, it stands at $2,581 with a market capitalization of $309.48 billion.

This underperformance has led several top traders, including Eugene Ng Ah Sio (@0xENAS), Crypto Chase (@Crypto_Chase), and Trader XO (@Trader_XO) to step away from Ethereum throughout late 2024 and early 2025.

However, sentiment may now be shifting. Institutional interest is beginning to return, driven by potential U.S. regulatory changes, growing stablecoin activity, and the increasing recognition of Ethereum’s role as key blockchain infrastructure. Recent observations from Grayscale and leading traders suggest Ethereum may be positioned for a significant recovery.

Grayscale: Ethereum Well-Positioned to Benefit from U.S. Stablecoin Regulations

According to Grayscale’s recent YouTube video, Ethereum’s performance has lagged in terms of network growth. Since late 2022, Bitcoin’s market cap has grown by $1.35 trillion, while Ethereum’s has increased by only $90 million. In 2024, Solana’s price rose 18 percent, while Ethereum’s dropped 18 percent. Solana also experienced fee growth, while Ethereum’s fees declined.

Despite this, institutional interest in Ethereum is starting to resurface. On July 5, Grayscale posted on X, “With strong dev activity and scaling plans, #Ethereum is well-positioned to capitalize.” The firm highlighted Ethereum’s potential to benefit from upcoming U.S. regulatory shifts, particularly legislation like the Genius Act, which aims to provide clearer rules for stablecoins. These changes could drive investment and accelerate smart contract adoption.

In the same YouTube video, Michael Zou from Grayscale provides further insight into Ethereum’s position. He describes Ethereum as the leading smart contract platform, supported by a large market cap, a wide range of applications, strong developer activity, and significant on-chain assets like stablecoins and tokenized items. “That’s why we see ETH as a must-have in any crypto mix,” Zou emphasized.

Ethereum generates revenue through gas fees paid for transactions and smart contract usage, currently earning around $1.7 billion annually. Zou believes this figure could exceed $20 billion if scalability and user adoption improve.

Zou believes Ethereum is well-positioned to capture this growth, especially as U.S. regulatory changes pave the way for broader blockchain adoption. “We expect smart contract apps to take off in the next one or two years thanks to the U.S. rule changes,” he said. With its strong developer base, substantial on-chain liquidity, and open design, Zou concludes that Ethereum is ready to shine, particularly in decentralized finance.

Bankless Co-founder Highlights EVM as a Suitable Standard for Traditional Finance

This growing institutional interest is further supported by leading industry voices who see Ethereum’s technical standards as key to bridging traditional finance and blockchain infrastructure. David Hoffman, co-founder of Bankless, shared on X that Ethereum’s investment in minimizing MEV (Maximum Extractable Value) in a fair and neutral way is similar to "compliance" in traditional finance. While chains like Robinhood with a single sequencer may not face illegal MEV issues, Ethereum’s focus on fair MEV could make it more attractive to traditional financial institutions.

Hoffman also emphasized the significance of Robinhood’s EVM-equivalent network. “The most bullish thing about Ethereum is its network effects. Robinhood is now investing in engineers to become proficient in the EVM and broader Ethereum standards,” he said. “Compared to alt-L1s with no clear specifications and higher technical barriers, the only reasonable standard TradFi can adopt is the EVM.”

Top Trader 0xENAS: Ethereum’s Market Setup Signals Potential Rebound

Beyond institutional interest and industry perspectives, some traders are also beginning to revisit Ethereum’s potential, citing structural shifts in positioning and sentiment. On July 7, one of the best traders Eugene Ng Ah Sio (@0xENAS) shared on Telegram that he has now reversed his stance on Ethereum after observing notable changes in its positioning and market dynamics. Following the April 2025 decline, where ETH dropped from $4,000 to $1,300, many traders and whales exited their positions. Since then, ETH has appeared under-positioned, with limited active interest from traders. 0xENAS views this as a potential setup for a price recovery. He also noted that ETH still has room to catch up to Bitcoin’s price performance, and the “still early” narrative may appeal to traditional finance participants. Even if ETHBTC does not break out, historical trends suggest ETH often performs well when Bitcoin rallies.

0xENAS also highlighted that Ethereum may become the primary infrastructure and stablecoin platform for institutions and traditional finance. With over 90% of stablecoins currently on Ethereum and new U.S. stablecoin regulations expected, he sees Ethereum as a potentially safer and more practical option compared to other Layer 1 networks.

Additionally, former Ethereum core developer Eric Conner outlined three factors that may support a possible breakout for Ethereum: growing stablecoin activity, continued inflows into spot ETH ETFs, and declining ETH balances on centralized exchanges. Conner noted that ETH has been consolidating in the $2,400 to $2,600 range, with lower trading volume and gradually rising lows. He suggested that a decisive move above $2,600 could lead to a rapid price movement.

Ethereum Spot ETFs See $219M Inflow Last Week

According to SoSoValue data, Ethereum spot ETFs recorded a net inflow of $219 million during the past trading week (June 30 to July 3), with all nine ETFs reporting no outflows. As of the time of writing, total net assets across all Ethereum spot ETFs have reached $10.83 billion, accounting for 3.45% of Ethereum’s total market cap. The cumulative net inflow now stands at $4.40 billion.

Ethereum’s Next Phase

The return of institutional capital, rising Ethereum ETF inflows, and signs of steady on-chain activity suggest Ethereum may be approaching an important juncture. While short-term price action continues to present challenges, the broader structural factors appear to be developing. With stablecoin usage expanding, potential regulatory clarity emerging, and Ethereum’s established role in both decentralized and traditional finance, conditions are aligning for what could shape its next phase.