The Rise of Ethereum: Multiple Drivers from Fundamentals, Technology, and Institutional Layouts

In the past week, Ethereum achieved a weekly increase of 26.4%, breaking through the 2800 resistance level, and approaching the 4000 mark. This rising pattern is more akin to the institution-led Bitcoin model, characterized by a combination of gentle ascents and strong surges, which is atypical of a retail investor bull market. This pattern allows for profit digestion during high-level consolidation, reducing risk indicators.

Even if the supply ratio of profits reaches the peak levels of previous bull markets, the rise led by institutions is unlikely to follow the pattern of a retail-driven bull market, but instead tend towards a stable upward trend similar to Bitcoin, allowing the profit supply ratio to decrease while consolidating at high levels.

The Impact of Future Ethereum Upgrades on Fundamentals

1. Lower the verification threshold to promote the popularization of light nodes: Plans to launch in the second half of 2025, gradually reducing the staking requirement from 32 ETH to 1 ETH, optimizing mechanisms to increase the return rate, and introducing a light node verification model. It is expected to drive the staking rate above 40%, locking up 48 million ETH, and strengthening the deflationary trend.

2. Achieving cross-chain liquidity integration between the mainnet and L2: planned to launch by the end of 2025, aiming to break down the interaction barriers between the mainnet and major Layer 2 networks, integrate liquidity pools, reduce cross-layer transaction costs, and improve the capital efficiency of DeFi protocols.

3. Reshaping the Ethereum Virtual Machine with RISC-V architecture: R&D is expected to start in the second half of 2025, aiming to increase the execution speed of smart contracts by 3-5 times and reduce Gas fees by over 50%, paving the way for high-frequency trading, gaming, and other scenarios.

4. Mainnet introduces zkEVM: planned to be deployed by the end of 2025 to mid-2026, aiming to achieve 99% block verification within 10 seconds, reduce verification costs by 80%, and improve mainnet performance and cost-effectiveness.

Despite the Ethereum Foundation demonstrating higher efficiency, on-chain data shows that gas fee revenue, transaction volume, and activity levels still have a significant gap compared to the peak of the 2021 bull market. The current price increase is difficult to attribute to fundamental improvements or upgrade expectations.

ETH ETF Holdings Situation and Its Impact on Asset Attributes

Since the approval of the ETH spot ETF in July 2024, the average price of ETH has fluctuated around $2500, which is below the cost of most institutional positions. As of now, U.S. spot ETF institutions hold about 5.038 million ETH, with BlackRock holding 2.461 million.

The value perception of ETH as an asset is shifting from "technical narrative" to "financial product positioning". Institutional funding support may undermine the "crypto fundamentalism" value of ETH, but it provides more sustainable financial support.

Unlike Bitcoin's "fixed supply", the ETH supply model is more dynamic and difficult to achieve the strategic reserve attribute of "selling out". The logic behind institutions holding ETH goes beyond price speculation; it is also a prediction of the status of blockchain infrastructure.

The scarcity of ETH relies on ecological vitality, and institutional promotion of ecological prosperity is more important than static holdings. In the future, attention should be paid to which sectors will become the main force in ETH Gas consumption, forming structural opportunities.

The Current Status and Challenges of Old DeFi Protocols

Old DeFi projects may achieve higher growth during the rise of ETH, but the requirements for retail investors are extremely high. Most projects struggle to continuously accumulate popularity and users, and short-term surges are often driven by "thematic factors" rather than "sustained strength in fundamentals."

In contrast, the logic of ETH itself is clearer: the influx of ETF funds provides price support, and the underlying technology roadmap is gradually being implemented. Although the relative increase may not be as high as that of smaller coins, it has high certainty, low holding pressure, and ample liquidity.

For most investors, grasping the stability of ETH as a base currency and waiting for new narratives to take shape may be a more rational choice.

The Impact and Challenges of ETH ETF Staking

BlackRock has applied to introduce ETH ETF staking functionality, which is seen as a signal of entering the yield optimization phase. Issuers can stake through multiple third-party service providers, but must establish dedicated pools for isolated management.

Staking rewards will be regarded as ETF trust income, and the issuer can manage it with full authority. This increases the potential yield of the product and the profit margin for the issuer, but it also brings the issue of asymmetric risk-return distribution.

Technical Indicator Analysis

As of July 18, 2025, the proportion of floating profit chips in ETH has risen to 95%, approaching historical highs. This highly concentrated floating profit state often occurs during localized overheating phases, indicating that short-term trading sentiment is saturated and may enter a correction.

However, combining the historical chip distribution, trading depth, and capital flow, there are no signs of systemic risk yet. Macroeconomic factors and the activity level of the Ethereum ecosystem will also affect the evolution of the market.

The Impact of Bitcoin Trends on Ethereum

On-chain data from Bitcoin shows that a total profit of 4.3 billion USD has been realized, and long-term holders have started to release their chips to the market. Despite the large profit taking, the BTC price has not significantly retraced, indicating the resilience of market buying.

This "high-level support capacity" provides confidence support for the upward movement of the ETH price. Bitcoin has formed a uniform chip range, making it difficult for the bull market peak signal to trigger. Currently, it shows a stable upward structure in a converging volatility pattern, exhibiting strong stability.