In the midst of strategizing, we decide the outcome from a thousand miles away. Hello everyone, I am Lin Chao, a global financial market observer, focusing on cryptocurrency market analysis, bringing you the most in-depth trading information analysis and technical teaching.

Recently, many fans have asked Lin Chao to talk about Ethereum. Although Bitcoin continues to hit new highs, everyone is wondering whether this "altcoin season" can explode as expected, and they are more concerned about Ethereum's influence. It is undeniable that during this round of price increase, Ethereum's performance has indeed been more eye-catching. Today, Lin Chao will take you back in time to analyze in detail why Ethereum has performed so outstandingly in this round of increase.

The Ethereum market at the beginning of 2025 resembled a thrilling roller coaster. The price plummeted from the high of $4,000 at the end of 2024, halving to $1,500 in just a few months, performing even worse than many altcoins and meme coins. When retail investors were crying out in despair and KOLs were loudly shorting, a silent power transfer was quietly taking place behind the scenes — but Lin Chao discovered that this was not a natural market decline, but a carefully designed power handover.

During the five months of ETH's free fall (from December 2024 to April 2025), the Herfindahl-Hirschman Index, which measures asset concentration, rose against the trend, approaching the high of 2018. Chips were massively flowing from terrified retail investors into the hands of a few silent whales. This trend of centralization not only did not weaken ETH but also laid the groundwork for subsequent control and violent fluctuations — a classic method of major players accumulating positions, quietly completing their layout in the most desperate abyss. So what were they doing? Changing hands.

Lin Chao found from on-chain data that in May 2025, SharpLink Gaming (SBET) announced a PIPE financing of $425 million to purchase 176,000 ETH, causing its stock price to soar by 400%. Companies like BitMine (BMNR), BTCS, and Bit Digital (BTBT) quickly followed suit, announcing huge ETH investments and strategic transformations within a month. They were no longer satisfied with simply hoarding coins but delved deeper into structured operations such as staking yields and DeFi cash flow capture, weaving a sophisticated network to capture Ethereum's value.

In just a few months, over 50 Ethereum strategic reserve companies emerged, holding a total value of ETH exceeding $4 billion, accounting for more than 1% of the circulating supply. Among these "new players," some have entered the ranks of the largest institutional holders of ETH, with holdings even surpassing that of the Ethereum Foundation, reaching nine times that of the U.S. government's holdings. The astonishing price increases of companies like SBET and BMNR far exceeded traditional crypto giants, clearly marking a new direction for capital flow. By the time we truly realized the change of hands, ETH had already returned to above $3,000. At this point, looking back, the change of hands had been completed, and the average cost of the "new players" had quietly settled around $1,500.

Lin Chao's Summary

Lin Chao believes that, in essence, the on-chain fundamentals remain solid: EIP-1559 continues to burn, leading to mild deflation, with over a quarter of ETH securely staked in the network, and the Rollup expansion route steadily advancing. Therefore, the structural situation on the Ethereum chain has not changed.

What has truly changed is the narrative structure and the audience being addressed — previously, Ethereum was innovating through DeFi narratives, claiming to create a set of "structured yield tools" tailored for traditional finance, using this logic to absorb funds from small institutions and idle retail investors.

Now, it is about publicly listed companies financing to purchase ETH, and then generating stable cash flow through on-chain strategies such as staking, lending, and MEV capture. The story of "stablecoin underlying architecture" and "institutional staking demand" is being strongly marketed to Wall Street. In simple terms, it is about using ETF narratives for stable returns, hoping to gain the trust of more traditional institutional capital from Wall Street. This is very similar to the story of Bitcoin. Therefore, we can see that the recent surge in Ethereum has been so fierce that it even surpassed Bitcoin's increase. The reason behind this is just that — the change in the weight of holders means that Ethereum will gradually become an asset that retail investors cannot touch, becoming a battleground for large capital institutions.

However, Lin Chao wants to remind everyone that although the "new players" in Ethereum have changed their thinking, indeed many traditional capital players are holding more Ethereum through ETFs, leading to a noticeable price increase in the short term. However, Bitcoin and Ethereum are fundamentally different in logic; the most crucial point is that Bitcoin has a capped total supply, while Ethereum does not. It is well known that "scarcity" is one of the important metrics for capital investment. If Ethereum wants to replicate Bitcoin's growth path but cannot reasonably avoid the issue of ETH's over-issuance, then traditional capital cannot continuously invest to drive up the coin price. Therefore, how to solve the problem of "scarcity" loss caused by over-issuance will become the most important factor for Ethereum's future rise.

If this round of Ethereum's increase is due to the low average holding cost after the "change of hands," and the influx of traditional capital from Wall Street, then Lin Chao believes that it will be difficult for ETH's price to break through previous highs before the scarcity issue is perfectly resolved. Based on this, for users planning to hold Ethereum spot for the long term, the right timing for entry becomes particularly important. Should one chase high due to FOMO, believing it will break previous highs? Or should one wait for market sentiment to cool down and observe whether it reaches its rightful value trough before entering? We know that the holding cost of the "new players" and institutions is around $1,500, so what range would be suitable for retail investors' holding cost? If users have questions about entry ranges and position management, they can also message Lin Chao for reference on cost control.

From a technical perspective, we can see that Ethereum's price rose from a low of $2,111 on June 22 to $3,381 as of July 17 (the date of publication). In just 15 trading days, it has increased by $1,269, a rise of over 37%, and has consecutively broken through two resistance levels, approaching previous highs, and has completed a "support-resistance swap" around $2,870. If it can stabilize above $3,375, the price may indeed challenge new highs again. However, without any major positive news support, this level of increase is clearly in the "irrational market" space. Lin Chao has always emphasized that traders must remain rational and not be guided by market sentiment; the focus should be on profits themselves, rather than chasing maximum increases. I will also take profit in this range for the ETH I held earlier.

Success in investing depends not only on choosing good targets but also on when to buy and sell. Preserving capital and making good asset allocations are essential for steady progress in the ocean of investment. Life is like a long river flowing into the sea; what determines victory or defeat is never just the gains and losses of a single pass or a moment, but rather planning before action and knowing when to stop to gain.

The global market is ever-changing, and the world is a whole. Follow Lin Chao to gain a top-tier global financial perspective.

For real-time consultation, feel free to follow the public account: Lin Chao on Cryptocurrency.

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