This research report will delve into three main lines of inquiry—policy catalysis, institutional confidence endorsement, and narrative and market structure—to deeply analyze the logic and future pricing path of the ETH bull market.
Abstract
On August 7, 2025, the United States officially signed an executive order allowing 401(k) retirement plans to invest in a diversified asset class that includes crypto assets. This marks the most structurally significant institutional upgrade since the Employee Retirement Income Security Act (ERISA) of 1974. The relaxation of policies, combined with the entry of long-term funds such as university endowment funds, Wall Street narrative driving, accelerated inflows into ETFs and futures markets, and macro tailwinds from expectations of Federal Reserve interest rate cuts, collectively propelled Ethereum to gain funding momentum and pricing power that surpasses Bitcoin in this market cycle.
This article will systematically analyze the deep logic of ETH's transformation into a financial asset from the perspectives of institutional breakthroughs, institutional layouts, and the evolution of market narratives, while also looking ahead to structural opportunities and investment strategies in the coming months.
As of now, the total market capitalization of the global cryptocurrency market has exceeded $4 trillion, setting a historical high. Compared to about $1.08 trillion at the beginning of 2023, this represents nearly a fourfold increase in less than three years, reflecting the explosive power of the market driven by institutionalization.
According to CMC data, the market capitalization rose by approximately 8.5% in the past week, with a cumulative increase expected to be in the range of 10-12% over the past two weeks. This trend is not driven by a single market event but is the result of a combination of institutional policy support, changes in institutional allocation, market structure optimization, and narrative catalysis.
This research report will focus on three main lines of inquiry—policy catalysis, institutional confidence endorsement, and narrative and market structure—to deeply analyze the logic and future pricing path of the ETH bull market, and provide investors with a comprehensive perspective through historical analogies, data modeling, and risk analysis.
1. Policy Catalysis: The Structural Significance of 401(k) Opening
1.1 Historical Context: The Pension Revolution from Stocks to Crypto Assets
To understand the significance of the opening of crypto assets in 401(k) plans, we need to place it within the context of over a century of evolution in the U.S. pension system. The last "paradigm shift" occurred after the Great Depression. At that time, pensions were primarily based on a defined benefit (DB) system, with funds locked into a "legal list" of government bonds, high-quality corporate bonds, and municipal bonds, driven by a single logic—safety first. The stock market crash of 1929 devastated corporate cash flows, leaving many employers unable to fulfill their obligations, forcing the federal government to step in with the Social Security Act; post-war, bond yields fell sharply, with municipal bonds dropping to around 1.2%, which could not cover long-term promised returns. It was in this imbalance of "safety and returns" that the "Prudent Man Rule" was reinterpreted in the 1940s and 1950s: it was no longer "only the safest investments are allowed," but rather "the overall portfolio must be prudent," leading to a limited inclusion of stocks. In 1950, New York allowed pensions to allocate up to 35% to equity assets, followed by states like North Carolina; there was significant opposition—"gambling with workers' hard-earned money"—but history favored growth. The ERISA of 1974 enshrined the modern framework of "prudent investment" into national law, deeply binding pensions to capital markets, which later contributed to the long bull market in U.S. stocks and the modernization of financial markets.
On August 7, 2025, Trump signed an executive order that pushed the pendulum of "risk-return rebalancing" to the forefront again: 401(k) plans can now invest in private equity, real estate, and for the first time, crypto assets; it also requires the Department of Labor to collaborate with the Treasury, SEC, and other agencies to assess whether rules need to be modified and how to provide a "menu" and compliance convenience for plan participants to include alternative assets. This is not an isolated "policy benefit," but rather the most structurally significant upgrade to the pension system since ERISA: it includes high-volatility early-stage digital assets into the core retirement accounts of the American middle class—401(k). It directly answers two questions: first, do crypto assets qualify for long-term holding by institutional funds? Second, who endorses this qualification? The answer is straightforward—"national-level" framework and the U.S. pension system.
1.2 Analysis of the 401(k) System and Assessment of Funding Potential
To understand its scale, we need to shift our perspective from "news" to "asset pool." The U.S. retirement system operates on three parallel levels: Social Security, Individual Retirement Accounts (IRA), and employer-led defined contribution (DC) plans, with 401(k) being the absolute mainstay of DC. By March 2025, the total assets of all employer-led DC plans were approximately $12.2 trillion, with 401(k) accounting for about $8.7 trillion, covering nearly 60% of American households. The investment channels for 401(k) are primarily mutual funds, with about $5.3 trillion in mutual fund accounts, including $3.2 trillion in equity funds and $1.4 trillion in mixed funds; this indicates that even within the "pension" framework, the U.S. risk tolerance and pursuit of returns are no longer confined to the old world of "only buying bonds." The executive order now opens the door to adding "crypto assets" to the menu alongside stocks, bonds, REITs, and private equity.
To translate "possibility" into "scale," we can see how significant this door is. Assuming only 1% of the 401(k) asset pool chooses to allocate to crypto assets, this theoretically means about $87 billion in medium to long-term net buying; if it’s 2%, that’s $174 billion; at 5%, it would be about $435 billion. In comparison, we can observe the reality: since the beginning of this year, the net inflow into Ethereum spot ETFs has accumulated to about $6.7 billion, while in just two days after the executive order took effect, the ETH ETF saw an additional $680 million in net inflow.
Why did ETH's price react significantly stronger than BTC this time? If we only look at the "news-price" correlation on the same day, we might misjudge the market as "consuming the story." A more complete picture emerges when we consider both on-chain and off-chain dimensions. First is the "capacity for funds": ETH has a lower price base and a broader ecological application (DeFi, stablecoin settlement, L2 settlement, RWA tokenization), making it more favorable for the "long-term funds-productization" narrative; second is the "preparedness of products": with Bitcoin ETFs having been operational for over a year, Ethereum spot ETFs naturally inherit the funding and compliance framework, making the "shortest path" for the executive order to be "copying from IBIT to ETHA"; third is the trading structure: after the executive order was announced, CME ETH futures saw annualized premiums rise above 10%, significantly higher than BTC, providing clearer hedging and leverage paths for funds; finally, there is the "dominance of narrative": over the past two months, BitMine has established itself as "the largest ETH treasury company" within 35 days through a rhythm of "disclosure—financing—accumulation—re-disclosure," and has turned off-chain structured tools (Galaxy's OTC design + on-chain delivery + custodial settlement) into a reusable template; Tom Lee's target price of "$15,000" spread this template from institutional circles to media and retail investors, compounded by the verifiable data of $680 million in net inflow into ETFs over two days, turning the narrative into "self-evidence." This is not "storytelling driving prices," but rather a closed loop of "structural design connecting funds—price self-validated—narrative passively reinforced."
Of course, equating "national endorsement" directly with "risk-free appreciation" is dangerous. The coupling of technology and institutions in crypto assets is still in a "transitional zone": on-chain event risks (contract security, cross-chain bridges, oracle manipulation), macro policy uncertainties (anti-money laundering, stablecoin regulatory frameworks, tax system definitions), and judicial risks (the boundaries and proof obligations of trustees being sued) could trigger "unexpected" repricing in a single event. The "low turnover" of pensions helps reduce volatility, but if product design does not address "redemption gates," "premium/discount management," and "liquidity survival in extreme market conditions," it could amplify shocks during stress tests. Therefore, true institutionalization is not just about "buying it in," but also about "managing it": insurance pools and compensation terms, triggering conditions for catastrophic events, auditing and evidence collection processes, on-chain transparency and traceability—all need to align with the "operational risks" that pensions can afford.
Returning to the asset level, this policy's "structural benefits" for ETH are also reflected in both supply and demand. On the demand side, we have already seen: the "re-acceleration" of ETFs, the premium on CME futures, and the sample diffusion from treasury companies and endowment funds; on the supply side, staking locks up originally "active and tradable" ETH into "yield-bearing staked assets," while EIP-1559's burn mechanism has kept "net issuance" very low during active periods. A market characterized by "drip-fed long-term demand + reduced/locked supply" will naturally exhibit the curve features of a "slow variable bull market"—not a sharp daily surge, but rather a gradual rise and convergence of pullbacks on a quarterly basis. This also explains why on the day the executive order was announced, BTC only rose about 2%, while ETH quickly surged and recorded a net inflow of $680 million into ETFs over two days: the market is pricing "institutionalizable growth" more into assets that possess multi-purpose settlement layers and characteristics that can be embedded in financial products.
Finally, translating "scale" into "path." In the short term, the first to reflect the policy will still be secondary market ETFs and off-chain structured products (easy to audit, risk control feasible, custodial coverage); in the medium term, some target risk funds/balanced funds may attempt to embed a "crypto factor" in small proportions; in the long term, if the Department of Labor and SEC provide clearer guidelines on QDIAs, true "passive" crypto allocations will appear in the "default investments" of 401(k). This path does not require "mass enthusiasm"; what it needs is "pension-grade engineering" that is compliant, verifiable in risk control, insurable in custody, and auditable in disclosure. When these links are connected, 401(k) will turn "possibility" into "net buying"; and when net buying steadily drips into a network asset with gradually shrinking supply elasticity at a low frequency of 0.5 times/month over several years, a "new equilibrium" of price and volatility will emerge—this will not just be a "market event," but an upgrade of an asset class.
2. Institutional Confidence Endorsement: The Crypto Layout of University Endowment Funds
Like pensions, university endowment funds, which possess the attribute of "perpetual capital," are pushing crypto assets from the margins of experimentation to the forefront of institutional allocation. Their asset-liability goals are intergenerational—seeking to achieve long-term real returns of "inflation + α" through diversified asset portfolios while adhering to an annual spending rate of about 4%–5% and maintaining purchasing power against long-term inflation erosion. A common characteristic of these funds is their long duration, low turnover, and extreme sensitivity to compliance and fiduciary responsibilities: any new asset must pass through three thresholds to enter the investment committee's "core menu"—legality and custodial feasibility, verifiability of valuation and auditing, and the collaborative and diversification value with existing assets in the cycle. For this reason, the exposure to Bitcoin (and by extension, Ethereum) disclosed by several leading U.S. universities between 2024 and 2025 carries significant weight: it is not a pursuit of short-term trends but a vote by long-term funds on "whether it is worth including in the strategic asset pool."
From a timeline perspective, these institutions generally follow a similar path: around 2018, they established indirect exposure through crypto-themed venture capital funds for "research—small pilot" projects; around 2020, they attempted small-scale direct holdings through exchanges or over-the-counter channels to form "operational experience"; since 2024, with the maturation of spot ETFs and custodial auditing systems, they have begun to include fairly valued, intraday redeemable, and liquid products in their disclosure forms. Harvard University serves as the most symbolic example: the Harvard Management Company (HMC), managing approximately $50 billion, disclosed in its latest 13-F filing that it holds about 1.9 million shares of the BlackRock iShares Bitcoin Trust (IBIT), valued at approximately $116 million at the time, ranking among the top five publicly disclosed holdings alongside Microsoft, Amazon, Booking Holdings, and Meta, even exceeding its holdings in Alphabet. By placing Bitcoin ETFs in the lineup of "competing products," it signifies a transfer of pricing power—in Harvard's asset view, it is treated as a value-assessable, rebalancable asset that can form a "dual anchor" against inflation and growth alongside gold and growth stocks. A finer signal is that during the same period, Harvard also increased its allocation to gold ETFs (publicly reported as approximately 333,000 shares of SPDR Gold Trust, about $101 million), indicating that its portfolio strategy is not about "abandoning the old for the new," but rather balancing geopolitical friction and dollar liquidity's cyclical volatility through a "commodity anchor + digital anchor" approach: when gold strengthens as a "crisis hedge," Bitcoin enhances "liquidity easing and institutionalization process" beta, and the correlation between the two will alternately reduce tail risks in the portfolio across different macro stages. The first U.S. university to "speak out" was Emory University. On October 25, 2024, Emory publicly disclosed its holding of nearly 2.7 million shares of Grayscale Bitcoin Trust (GBTC), valued at approximately $15.1 million at the time; as Bitcoin prices rose in the following year, the nominal value of this position approached $30 million.
The institutionalization of crypto assets is not only driven by established institutions but also by new entities redefining the narrative. The University of Austin (UATX) announced in February 2025 the establishment of a Bitcoin-specific fund exceeding $5 million, included in its endowment fund management, with a clear holding period of at least five years. Stanford's case showcases the cutting-edge momentum of "on-campus investment culture." Although the university's endowment fund has not yet disclosed holdings in crypto assets, the student-operated Blyth Fund decided in March 2024 to allocate about 7% of its portfolio to IBIT when Bitcoin was priced around $45,000. Blyth is not a formal endowment fund but part of the university's discretionary fund pool, with assets only in the hundreds of thousands, yet it reflects the future managers' risk awareness and tool capabilities—these students embrace new assets through ETF tools that are "pension-grade" within a real investment framework, and this methodology will naturally transfer when they enter large institutions. As for traditional heavyweight institutions like Yale, MIT, and Michigan, their style is more "steady and invisible."
If we place these dispersed actions on a chart, we can identify several clear logical threads. First, path dependence: almost all universities tend to enter through ETFs/trusts to avoid direct private key custody and operational risks; second, scale and pace: starting with small amounts to verify processes and risk control, then discussing whether to elevate to "strategic allocation" levels based on volatility, correlation, and drawdown performance; third, portfolio roles: Bitcoin primarily assumes the role of "digital gold," serving as a vehicle for macro hedging and liquidity beta; Ethereum, on the other hand, gains increasing attention in narratives such as "financial markets on-chain," "on-chain settlement layer," and "RWA tokenization infrastructure," especially after the opening of spot ETF channels and the 401(k) menu, its capacity from an institutional perspective gradually approaches that of Bitcoin. It is precisely within this portfolio logic that we see a structural difference in the net inflow of $680 million into ETH over two days following the executive order, with CME ETH futures premiums exceeding those of BTC: when "long money" assesses which asset is more like "an asset that can be embedded in financial product systems," ETH's multi-purpose attributes and yield generation (staking rewards, MEV distribution, etc.) provide it with stronger marginal elasticity.
It is also noteworthy that university endowment funds and pensions share the same "long money culture." The former represents the intergenerational mission of the academic community, while the latter represents the retirement security of the middle class in society. Therefore, simply interpreting the entry of university endowment funds as "chasing the trend" is a misreading. They are more like "experimental fields for incorporating crypto assets into long-term balance sheets": using the most quantifiable ETF entry points, applying the strictest fiduciary processes for stress testing, and placing crypto assets within the coordinate system of "gold—growth stocks—high-quality bonds"; if drawdowns are bearable, correlations can diversify during crises, and cash flows (for ETH, this is staking income) are measurable, then the weight could potentially shift from "basis points" to "percentage points." Once this migration occurs repeatedly in disclosures from more schools and over more quarters, it will no longer be "news" but will become "common knowledge." When this common knowledge meets the institutional "drip irrigation" of 401(k), the "strategic hoarding pool" at the market bottom will take shape—quiet but powerful.
3. Narrative-Driven and the Transfer of ETH Pricing Power
If the transfer of Ethereum's pricing power in this round is the "invisible hand," then the back of the hand is a series of real monetary transactions, and the palm is the carefully orchestrated rhythm of information. The most evident distinction lies in the parallel and bifurcated paths of two types of capital: on one end is the OG logic represented by SharpLink—low cost, long cycle, on-chain fundamentals, and information closed-loop, relying on time to exchange for space; on the other end is the Wall Street approach represented by BitMine—structured financing, rhythmic disclosure, media positioning, and price resonance, leveraging structure to amplify time. Both are "buying ETH," but their methodologies point to two completely different pricing systems: the former believes that prices will revert to value, while the latter actively carves the narrative of value into the price.
The story of SharpLink begins with the cost of holding. It is backed by shareholders covering the infrastructure and financialization chain, including Consensys (with Lubin as board chairman), Pantera, Arrington, Primitive, Galaxy, GSR, and Ondo, passively ensuring the closed-loop capability of "buy—manage—use—custody—derive." Its early positions largely came from internal transfers within team wallets rather than the public market, with small unit sizes and very long distribution cycles, emphasizing safety, liquidity, and audit cooperation, with a comprehensive cost range of $1,500–$1,800, some even below $1,000. This "hoarding mentality" brings two predictable outcomes: first, when the price returns to around $4,000, the historical chips will naturally exert selling pressure, which is almost institutional; second, information disclosure tends to be "wait for the earnings report," with the S-ASR submitted on June 12, 2025, allowing for stock sales at any time, further reinforcing the "slow is steady" committee style. When this path is applied to the question of "who defines the price of ETH," the answer is: the on-chain native community and time.
BitMine, on the other hand, smashed another answer onto the table in just 35 days. The timeline is clear as a script: from July 1–7, PIPE financing of $250 million landed, disclosing the first batch of about 150,000 ETH in storage; from July 8–14, an additional 266,000 ETH was added, bringing total holdings to over 560,000; from July 15–21, another 272,000 ETH was added, totaling 833,000 ETH. It did not wait for quarterly reports but used "interspersed" official website updates, media, and IR letters to slice the rhythm weekly, precisely releasing strong signals of "we are continuously buying"; at the same time, Galaxy Digital provided a toolchain of "OTC structured design + on-chain delivery + custodial settlement," ensuring efficient absorption without significantly raising slippage; more crucially, the disclosed average purchase price was about $3,491, avoiding the peak of the phase while locking in a sensitive threshold for the new upward channel.
This approach is effective because it accurately grasps the mechanism of narrative generation: first, the rhythm of time—breaking information into high-frequency fragments, allowing the market to have "no gaps" in continuity, reducing narrative entropy; second, the narrative container—packaging ETH from a "technical platform coin" into a "priceable, tradable, and cashable" financial asset, inventing a set of relevant metric language, such as ETH-per-share, combining on-chain staking income, burn rates, and spot ETF net inflows into a model that can be communicated to sellers, buyers, and the board; third, measurable verification points—solidifying expectations with concrete numbers: average purchase price of $3,491, 833,000 ETH over three weeks, stock price 9 times, CME futures annualized premium >10%, and "net inflow of $680 million into ETH ETFs over two days after the executive order," serving as "anchors" that media and institutional research can reference with the same set of calipers; fourth, channel positioning—linking IR letters, mainstream financial media, and social media short videos, allowing the narrative to be effective on both institutional (which needs models) and retail (which needs stories) ends. Thus, the chain of narrative is compressed into four steps: rhythmic release → media amplification → investor FOMO → price feedback to narrative. When the price confirms "we are indeed buying, and it rises after buying," a new pricing power will naturally emerge.
The role of individuals in this system has been amplified to "leverage on leverage." Tom Lee's value lies not in "accurate predictions," but in "narrative standardization." His Bitcoin Misery Index (BMI), on-chain activity, volatility, drawdown depth, ETF redemptions, and M2 environment are polished into three dimensions: a "sentiment dashboard" for retail investors, a "structural scorecard" for institutions, and "easy-to-understand headlines" for the media. He rarely allows for "empty windows" in front of the camera: at the bottom, he says, "sentiment is extremely painful, long-term holders' window," during the uptrend, he states, "a structural bull market is unfolding," and during drawdowns, he remarks, "the on-chain structure is repairing." The important thing is not how accurate the conclusions are, but the frequency, early positioning, and clarity of the message. When BitMine's three-week progress bar is continuously "pinned" in the media, Tom Lee also mentions a target price of ETH at $15,000 in a podcast, garnering 180,000 views and providing retail investors with "psychological permission to act," while the institutional research department receives "external endorsement that can be written into memos." Following this, the CME ETH futures premium structure changes, exceeding that of BTC, providing funds with a basis strategy to leverage; subsequently, a net inflow of $680 million into spot ETFs over two days digitizes the "buying power." This chain of "people—events—prices—volumes" allows for the transition of "ETH from a technical platform coin to a financial asset" to become not just an aspiration within the circle, but a perceivable, measurable, and repeatable fact in the external world.
Ultimately, pricing power is not about "who has the loudest voice," but rather "who can align prices more quickly and sustainably with a widely accepted narrative and metrics." The deepest structural change in this upward movement is not about who is "bullish" on ETH, but rather who "can explain, can carry, and can deliver" ETH—the narrative leaders are becoming the writers of prices.
Summary and Investment Insights
Overall, the reason this round of increases presents a "more sensitive and cleaner trend for Ethereum" is fundamentally due to the restructuring of capital: under the dual-track support of ETFs and derivatives, incremental buying is more easily prioritized towards assets with the deepest liquidity and strongest infrastructure attributes. In the two days following the executive order, ETH spot ETFs recorded approximately $680 million in net inflows, combined with about $6.7 billion in net inflows accumulated earlier in the year, indicating that the funding pipeline of "pensions—brokerage windows—ETFs—secondary markets" has become repeatable.
It is important to recognize that institutional allocation not only seeks beta but also manages the maximum drawdown of the portfolio and redemption liquidity constraints. In terms of "carry capacity," the depth of ETH's spot and derivatives order books is second only to BTC, and its ecological applications allow for the overlap of "non-financial demand" and "financial demand," making it the friendliest "bridge width" for passive funds. This also explains why, despite the announcement of favorable policies, BTC only rose about 2% within 24 hours, while ETH's price and trading volume expanded simultaneously, with both ETF and futures funding providing confirmation. In contrast, the "following—falling behind—re-differentiation" of altcoins is not unexpected but rather an inevitability of market structure.
On a macro level, this structure is provided with "the weather for funds." In July, the U.S. non-farm payroll data was weak, and the unemployment rate slightly increased, coupled with high-level regulatory hints of three interest rate cuts within the year. The CME "Fed Watch" indicated an approximately 88.4% probability of a 25 basis point cut in September, raising the nominal interest rate expectations and lifting the pricing ceiling for risk assets, while also enhancing "long money's" trade-off between medium to long-term returns/volatility. Interest rate variables transmit to the crypto market through two paths: first, the reduction in discount rates directly elevates the valuations of assets with cash flow potential, with ETH benefiting more significantly under the framework of "fees—burning—staking income"; second, the "U.S. dollar liquidity—asset reallocation" link positions U.S. stocks, gold, and BTC/ETH as the primary recipients, with Ethereum occupying the central narrative of pricing due to its "financial infrastructure" attributes. This round of upward movement for ETH is not merely a trading signal but a repricing of the asset class. It is opened by the "compliance pipeline" of pension system reforms, with funds being channeled into the secondary market through ETFs, futures, and over-the-counter structures, while treasury companies, university endowments, and long money accounts lower turnover rates and thicken the bottom. Finally, the media and research narratives standardize the dissemination of "verifiable facts." Only by understanding this logic can one grasp the core dividends of ETH's long-term value reassessment as the "trading-driven uptrend" gradually transitions into a "allocation-driven uplift."
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