The regulatory breakthroughs during the United States' "Cryptocurrency Week" and the capital trends surrounding Ethereum's main rise are opening an important chapter for the maturation of the cryptocurrency market.
I. Introduction
This week, the cryptocurrency market is witnessing two significant catalysts—the legislative push of Washington's "Cryptocurrency Week" and the intensive institutional layout around Ethereum, together forming a "policy inflection point" and "capital inflection point" for the cryptocurrency industry in the second half of 2025. The deep logic of this round of the cryptocurrency cycle is shifting from Bitcoin to Ethereum, stablecoins, and on-chain financial infrastructure. We believe that the clarity of U.S. policy combined with the institutional expansion of Ethereum marks the entry of the cryptocurrency industry into a structurally positive phase, and the focus of market allocation should gradually transition from "price speculation" to "capturing institutional dividends from rules and infrastructure."
II. U.S. "Cryptocurrency Week": Three Major Bills Signal Value Reassessment for Compliant Assets
In July 2025, the U.S. Congress officially launched "Cryptocurrency Week," marking the first time in U.S. history that a legislative agenda systematically advances comprehensive governance of crypto assets. Against the backdrop of dramatic changes in the global digital financial landscape and the continuous challenges to traditional regulatory models, the introduction of this series of bills is not only a response to market risks but also a signal that the U.S. is attempting to secure a dominant position in the next round of financial infrastructure competition.
The most milestone bill is the "GENIUS Act," which establishes a complete regulatory framework for stablecoins, covering key elements such as custody requirements, audit disclosures, asset reserves, and clearing processes. This means that the stablecoin system, which has long operated outside traditional financial regulation and relied on "market trust," will be incorporated into the U.S. sovereign legal structure for the first time. The Senate's strong bipartisan support (68 votes in favor, 30 against) for this bill also demonstrates its robust foundation of support, serving as a systemic "stabilizer" for the entire cryptocurrency industry. Once passed by the House of Representatives and signed by the President, this bill will officially take effect, marking the U.S. as the first major economy in the world to establish a unified financial regulatory framework for stablecoins.
Another key bill, the "CLARITY Act," focuses on the classification of crypto assets as securities or commodities. Its core intent is to clarify "which crypto assets are securities and which are not," and to delineate the regulatory boundaries between the SEC and CFTC. In recent years, the controversy over whether tokens like ETH and SOL should be classified as securities has led many companies and projects to migrate out of the U.S. market. If this bill passes smoothly, it will end the long-standing uncertainty surrounding the "regulatory gray area" of crypto assets, providing predictable legal grounds for project parties, exchanges, and fund managers, greatly unleashing the vitality of compliant innovation.
More politically symbolic is the "Anti-CBDC Surveillance National Act." This bill prohibits the Federal Reserve from issuing a central bank digital currency (CBDC), preventing the government from establishing real-time monitoring capabilities over individuals' financial activities through a digital dollar framework. Although this bill has not yet passed the Senate, it reflects the U.S. Congress's emphasis on financial privacy and market freedom. It also sends another signal: the U.S. does not intend to dominate digital financial transformation through state monopoly but chooses to support a market-driven, technology-neutral, and open-connected ecosystem of crypto assets.
Overall, these three major bills collectively point towards "regulation-driven innovation," emphasizing "clear boundaries and reduced uncertainty" in their means. Their core demand is no longer "restriction" but "guidance." Once legislation enters the implementation phase, several direct consequences are expected: first, the barriers preventing institutional investors from entering the market on a large scale due to compliance risk concerns will gradually be lifted, allowing pension funds, sovereign wealth funds, and insurance companies to legally deploy crypto positions; second, the role of stablecoins as "on-chain dollars" will be confirmed by policy, significantly amplifying their efficiency in cross-border settlements, decentralized finance, and RWA scenarios; third, compliant exchanges and custodial banks will gain policy endorsement, reshaping the trust structure of the global crypto market.
On a deeper level, this series of legislation is a strategic response to the new round of reshaping of financial order in the U.S. Just as the dollar became the global settlement currency relying on the Bretton Woods system after World War II, stablecoins are becoming the vehicle for the digital expansion of the dollar's influence, and the U.S. Congress is attempting to inject institutional legitimacy into them through regulatory means. This is a game of financial geopolitical power layout and a direct response to China's central bank digital currency (e-CNY) and the EU's MiCA regulatory framework. Whoever completes the construction of the regulatory system first will set the standards and hold the discourse power in the future global financial network.
Therefore, "Cryptocurrency Week" is not only a moment for the market to reassess the valuation logic of crypto assets but also a policy confirmation of technological trends. This institutional pricing signal will inject more stable expectation anchors into the market while providing investors with a path to identify "regulatable and sustainable" assets. We believe that this certainty in rules will gradually transform into certainty in valuation, and compliant assets, especially stablecoins, ETH, and their surrounding infrastructure, will become the core beneficiaries of the next round of structural revaluation.
III. ETH Institutional Arms Race: ETF Entry, Staking Mechanism Transformation, and Asset Structure Upgrade Progressing Simultaneously
Recently, with ETH prices rebounding strongly, market confidence is gradually recovering, and behind this is a new round of "capital arms race" surrounding Ethereum quietly unfolding. From Wall Street financial giants continuously increasing their positions through ETFs to more and more publicly listed companies incorporating ETH into their balance sheets, Ethereum is undergoing a profound restructuring of its market structure. This not only signifies that traditional capital's recognition of ETH has entered a new phase but also marks Ethereum's accelerated evolution from a highly volatile, high-tech threshold decentralized asset to a mainstream financial asset with institutional-level allocation logic.
Since the launch of the Ethereum spot ETF in July 2024, it was once seen as a significant catalyst for ETH price breakthroughs, but the actual performance disappointed the market for a time. Negative factors such as the decline in the ETH/BTC exchange rate, sluggish prices, and continuous reductions by the foundation meant that ETH did not immediately release upward momentum after the ETF listing, instead falling into a deep correction. Especially in the context of the great success of the Bitcoin ETF, ETH appeared rather lonely.
However, entering mid-2025, this situation began to quietly reverse. From on-chain data and ETF capital inflows, the institutional accumulation process for ETH is proceeding quietly yet firmly. According to SoSoValue statistics, since the launch of the ETF, the Ethereum spot ETF has attracted a cumulative net inflow of $5.76 billion, accounting for nearly 4% of its market capitalization. Although the price once retreated, the capital inflow has remained stable, indicating long-term institutional recognition of ETH's allocation value. This trend has accelerated in the past two months, with multiple Ethereum ETF products recording over $1 billion in monthly net inflows, and traditional financial players like Bitwise, ARK, and BlackRock have significantly increased their holdings.
At the same time, a more symbolic change comes from the rise of publicly listed companies "strategically reserving Ethereum." Companies like SharpLink Gaming, Siebert Financial, Bit Digital, and BitMine have announced plans to incorporate ETH into their balance sheets, marking a narrative turning point as ETH transitions from a "speculative asset" to a "strategic reserve asset." Notably, SharpLink currently holds over 280,000 ETH, surpassing the Ethereum Foundation's current 242,500 ETH, making it the largest single institutional holder of ETH globally. This fact has, to some extent, completed a partial transfer of "discourse power" on a symbolic capital level.
From the current structure of institutional participation, it can be clearly divided into two camps: one is the "Ethereum native camp" represented by SharpLink, which gathers early Ethereum ecosystem participants like ConsenSys and Electric Capital; the other is the "Wall Street approach" represented by BitMine, which directly replicates the Bitcoin reserve logic, leveraging leverage, financial operations, and financial report disclosures to create a capital amplification effect. This dual-pronged institutional accumulation model is causing ETH's value anchor and price support system to move away from traditional retail speculation towards a more institutionalized, long-term, and structured mainstream capital framework.
The profound impact of this trend is not only on the price level but also on the governance, discourse, and ecological dominance of the Ethereum network itself, which may face reconstruction. In the future, if companies like SharpLink or BitMine, which hold significant amounts of ETH, continue to expand their positions, their potential influence on the direction of Ethereum's development will be significant. Although these companies currently face financial pressures and their ETH allocations are more driven by speculative hedging and capital operations rather than a deep commitment to Ethereum's ecological construction, their entry has already created an amplification effect in the capital market: ETH is being revalued, and the market narrative is shifting from the crowded tracks of DeFi and L2 to a new space of "reserve assets + ETF + governance power."
It is worth noting that unlike the Bitcoin reserve narrative, which has a "spiritual leader" like Michael Saylor (CEO of MicroStrategy) continuously reinforcing recognition and advocating for accumulation, Ethereum currently lacks such a representative figure with both a faith background and traditional capital appeal. The emergence of figures like Tom Lee has sparked market associations but has not formed sufficient narrative penetration. The absence of such endorsements has, to some extent, slowed the path of trust transformation for Ethereum among institutional investors.
However, this does not mean that Ethereum lacks institutional responses. Vitalik Buterin and the Ethereum Foundation have recently been vocal, emphasizing Ethereum's technical resilience, security mechanisms, and decentralization principles, while also beginning to strengthen the "dual-track" structure of ecological governance mechanisms, aiming to embrace institutional capital while avoiding governance power being controlled by a single force. In a recent public article, Vitalik proposed that the interests of users, developer leadership, and institutional compliance must be balanced, and decentralization must be "operational" rather than merely a slogan.
In summary, ETH is undergoing a comprehensive change in its capital structure: moving from a retail-dominated open market to an institutionalized market structure driven by ETFs, publicly listed companies, and institutional nodes. The impact of this transition will be profound, as it will not only determine the future construction path of ETH's price center but may also reshape the governance structure and development rhythm of the Ethereum ecosystem. In this arms race, ETH is no longer just a representative of the tech stack but is becoming a key asset in the wave of digital capitalism, serving as both a value-bearing tool and a focal point of power struggle.
IV. Market Strategy: BTC Builds a High-Level Platform, ETH and Mid-High Quality Application Chains Welcome a Logic of Catch-Up
As Bitcoin successfully breaks through the $120,000 mark and gradually enters a consolidation phase, the structural rotation pattern of the cryptocurrency market becomes increasingly clear. With BTC dominating the logic, Ethereum and high-quality application chain assets are beginning to enter their own valuation recovery period. From capital flows to market performance, the current market shows a typical structure of "large-cap platform oscillation + mid-cap rotation upward," with ETH and a group of L1/L2 protocols that have both narrative and technical support becoming the most valuable direction for speculation after Bitcoin.
- BTC Enters High-Level Platform Construction Phase: Support Below, Weakness Above
As the main driving asset of this round of market, Bitcoin has basically completed its main upward wave driven by the narratives of spot ETFs, halving cycles, and institutional reserves. The current trend has entered a consolidation phase; although it remains in a technical upward channel, short-term upward momentum is weakening. On-chain data shows that the number of active BTC addresses and transaction volume have both declined to some extent, while the implied volatility of options in the derivatives market continues to decline, indicating a decrease in market expectations for short-term breakthroughs.
At the same time, the enthusiasm for traditional institutional allocation has not significantly diminished. According to the latest report from CoinShares, BTC ETFs still maintain slight net inflows, indicating that bottom support remains, but as expectations have largely been fulfilled, the subsequent upward pace of BTC is likely to slow down or even enter a phase of consolidation. For institutions, Bitcoin has entered a "core allocation" phase rather than continuing to chase short-term profits.
This also means that market attention is gradually shifting from Bitcoin to other growth-oriented crypto assets.
- ETH Catch-Up Logic Forms: From "Lost Leader" to "Valuation Lowland" Revaluation
Compared to Bitcoin, Ethereum's performance since the second half of 2024 was once seen as "disappointing," with significant price corrections and its ratio to BTC falling to a three-year low. However, during this downturn, ETH gradually completed its revaluation and optimization of holding structures. Currently, institutional recognition of ETH is rapidly increasing; not only is there continuous net inflow into spot ETFs, but the trend of publicly listed companies reserving ETH has also gained momentum, with even instances of Ethereum holdings surpassing those of the foundation.
From a technical perspective, ETH's price has broken through the previous downward trend line and is beginning to establish an upward channel, recovering multiple key technical moving averages. Combined with capital and sentiment indicators, ETH has entered a new cycle of market sentiment switching. During BTC's consolidation period, ETH's cost-effectiveness as a secondary mainstream asset is gradually increasing, compounded by factors such as L2 ecosystem expansion, stable staking yields, and improved security, leading the market to reassess its long-term value foundation.
From an asset allocation perspective, ETH currently not only possesses the advantage of being a "valuation lowland" but is also beginning to have institutional recognition and narrative completeness similar to BTC, combining technical and institutional advantages, making it the preferred catch-up target under capital rotation.
- Rise of Mid-High Quality Application Chains: Solana, TON, Tanssi, and Other Chains Welcome Structural Opportunities
Beyond BTC and ETH, the market is accelerating its shift towards mid-high quality application chain assets that have "real narrative support." Chains like Solana, TON, Tanssi, and Sui, with their multiple advantages of "high performance + strong ecosystem + clear positioning," have seen rapid capital concentration during this rebound.
Taking Solana as an example, the current ecological activity has significantly rebounded, with multiple on-chain applications returning to users' attention, and emerging narratives such as DePIN, AI, and SocialFi gradually taking root in the Solana ecosystem. Tanssi, as an emerging infrastructure protocol in the Polkadot ecosystem, is gaining widespread attention from institutions and developers by solving long-standing issues such as "complex application chain deployment, high operating costs, and fragmented infrastructure" through its ContainerChain model. Its collaboration with platforms like Huobi HTX also indicates an acceleration in its marketization process.
Additionally, as Ethereum shifts towards a more modular and data-availability-optimized path, middle-layer protocols (such as EigenLayer, Celestia) and L2 Rollup solutions (such as Base, ZkSync) are gradually releasing value, becoming important "valuation centers" between public chains and application layers. These protocols or platforms combine scalability, security, and innovation, becoming new frontiers for concentrated capital breakthroughs.
- Market Strategy Outlook: Focus on "Value Rotation" and "Narrative Advancement"
Overall, the capital rotation logic of this round of the cryptocurrency market has become clear: BTC peaks — ETH catch-up — application chain rotation is gradually unfolding. The strategic focus at this stage should revolve around the following points:
(1) BTC allocation remains, but is not the main focus: core holdings should remain unchanged, but it is not advisable to continue chasing highs, and attention should be paid to potential policy or macro disturbance risks.
(2) ETH as the core allocation target for rotation: technical recovery + strengthened institutional narrative makes it suitable for mid-term allocation, with further upward space if ETF capital accelerates inflow.
(3) Focus on mid-high quality public chains and modular protocols: chains with technological innovation, strong ecological foundations, and capital supporters (such as SOL, TON, Tanssi, Base, Celestia) have sustained upward potential.
Advance narratives and actively seek new opportunities on the margins: pay attention to early layout targets in DePIN, RWA, AI chains, and ZK directions, as these narratives are in the capital pre-positioning stage and may become the core of the next rotation.
The final conclusion is that the current market has shifted from a single asset-driven phase to a structural rotation phase, with BTC's main upward wave pausing, and the rotation of ETH and high-quality new public chains becoming the key driving force for the second half of the market. Strategies should abandon the habitual thinking of "chasing high leaders" and shift towards a mid-term trend layout of "valuation rebalancing + narrative diffusion."
V. Conclusion: Regulatory Clarity + ETH Main Rise, Market Enters Institutional Cycle
With the advancement of three key bills during the U.S. "Cryptocurrency Week," the industry has entered an unprecedented period of policy clarity. This clarity in the regulatory environment not only eliminates the compliance uncertainties that have lingered for years but also lays a solid foundation for the institutional and formal development of the cryptocurrency asset market. As the arms race for strategic reserves of core assets like Ethereum accelerates, the market is gradually entering a new cycle dominated by institutions.
In the past, the volatility and uncertainty of the cryptocurrency market largely stemmed from regulatory ambiguity and policy oscillation. Crises such as the FTX collapse and the Luna incident exposed the deep risks of regulatory deficiencies in the industry and left shadows in investors' minds. Now, with the implementation of regulations such as the "GENIUS Act," "CLARITY Act," and the anti-CBDC bill, market expectations for compliance have significantly increased, the entry barriers for institutional capital have been steadily lowered, and the trust and liquidity of assets have greatly enhanced. This not only helps reduce systemic risks but also provides a "bridge" for cryptocurrency assets to connect with traditional financial markets, legitimizing and standardizing the identities and behaviors of market participants.
In this institutional environment, Ethereum, as a leading smart contract platform, is entering a critical window for its main upward wave. Ethereum not only has a clear technical roadmap and active ecological innovation, but its network security and decentralized governance structure are continuously optimized, making it one of the preferred digital assets for institutions. The combination of strategic reserve trends and ETF capital inflows marks the beginning of a re-evaluation of Ethereum's value in the capital market. It is foreseeable that Ethereum will maintain a long-term healthy value growth trend driven by both on-chain application growth and capital support.
More broadly, the linkage effect of this regulatory clarity and the revival of mainstream asset values is gradually helping the cryptocurrency market break free from the previous "bull-bear cycle trap," evolving towards a more stable and sustainable institutional cycle. A significant characteristic of the institutional cycle is that market volatility is more guided by fundamentals and policy expectations, with asset price fluctuations no longer dominated by scattered emotions and regulatory news, but rather reflecting a healthy interaction and steady growth between capital and technology. The deep involvement of institutional capital will also promote improvements in market liquidity structure, shifting investment strategies from short-term speculation to medium- to long-term value investment.
Furthermore, the initiation of the institutional cycle also signifies the diversification of market structures and the multidimensional upgrading of ecosystems. The technological innovation and governance reform of the Ethereum ecosystem will continuously drive the diversification of on-chain applications, enhancing network utility, while regulatory clarity will accelerate the compliant development of more quality projects, fostering a deep integration of on-chain finance and traditional finance. This development pattern will reshape the investment logic of cryptocurrency assets, leading the market into a new normal of "technology-driven + capital rationality + regulatory support."
Of course, the institutional cycle does not mean the disappearance of market volatility; rather, volatility will become more endogenous and predictable, requiring investors to pay more attention to the continuous tracking of fundamentals and policies. At the same time, the interplay between market governance mechanisms, decentralization, and centralization forces will also become an important variable driving ecological evolution.
In summary, the regulatory breakthroughs during the U.S. "Cryptocurrency Week" and the capital trends surrounding Ethereum's main rise are opening an important chapter for the maturation of the cryptocurrency market. The market is transitioning from the chaotic and disorderly phase of "barbaric growth" to the institutionalized and standardized phase of "rational development." This not only enhances the investment value of assets but also promotes the overall upgrading of the cryptocurrency industry ecosystem, shaping the core foundation of the future digital economy. Investors should seize the opportunities of institutional dividends and the growth of core assets, actively layout Ethereum and quality application chains, and embrace a healthier and more sustainable new era of cryptocurrency.
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