On January 25, 2026, the Ethereum mainnet processed 2.88 million transactions in a single day, setting a historical record, while maintaining a relatively low fee range, allowing the narrative of "high throughput and low fees" to be realized for the first time at a data level. In contrast to this highway-like on-chain scene, off-chain funds are clearly cooling down: CEX Bitcoin daily trading volume has dropped to about 14,000 coins, the lowest since 2022, meanwhile, the Coinbase Bitcoin premium index has been in a negative premium range of about -0.1605% for 10 consecutive days, which some analysts view as a direct signal of "weak demand in the U.S. market." A mainnet that is advancing rapidly contrasts sharply with a secondary market where liquidity is continuously shrinking: who is using the network frequently, and who is quietly withdrawing funds? As on-chain performance flourishes but risk appetite declines, the narratives and funds in the crypto market are being reshuffled.
Mainnet Advances Rapidly: A New Narrative of 2.88 Million Transactions On-Chain
● Performance and Structure Interlinked: A report from Bitfinex shows that Ethereum reached a historical high of 2.88 million transactions in a single day on January 25, while the overall fees on the mainnet did not experience the uncontrolled surge seen in early bull markets. Behind this scene is Ethereum's progress on a modular path: more execution layer activities are being migrated to Layer 2 and peripheral systems, while the mainnet itself focuses more on batch settlement and state finality, resulting in a rare combination of "high throughput and low fees."
● Role Migration to a Neutral Settlement Layer: According to Bitfinex, the Ethereum mainnet is accelerating its transformation from an "application plaza" to a "neutral settlement layer" similar to traditional finance. This means the mainnet no longer seeks to carry all user interactions but instead provides reliable reconciliation and settlement services for upper-layer applications, Layer 2, and protocols, resembling a backend clearing system rather than a front-end trading hall. This positioning reshapes Ethereum's value logic: shifting from "front-end experience" to "financial infrastructure," aligning more closely with the functions of traditional clearinghouses and payment networks.
● Staking Lockup and Circulation Structure: Currently, Ethereum's staked amount is about 36 million ETH, accounting for about 30% of the circulating supply, which directly compresses the chips available for free trading in the secondary market and reduces the supply of tokens that can participate in high-frequency on-chain activities. For network activity, more ETH being locked in validators and re-staking systems means that price elasticity and leverage space are being redistributed, with mainnet activity increasingly relying on non-ETH assets and derivatives rather than the early model of "large amounts of ETH frequently circulating on-chain."
Soaring Throughput Yet Difficult to Convert into Incremental Funds
● Contrast Between Technical Prosperity and Conservative Funds: On one hand, Ethereum achieves historical levels of transaction throughput, while on the other, the overall crypto market capitalization and trading volume hover at low levels, presenting a "technical prosperity vs. conservative funds" structural contradiction. High-performance networks do not necessarily bring in new buying pressure, especially during a phase of existing capital competition, where more trades may simply be lower-cost turnover rather than new capital inflows, leading to a clear decoupling between on-chain data and price curves.
● From a Structural Perspective, "High Performance Does Not Equal a Bull Market": Without fabricating specific causal relationships, what can be determined is that high throughput and low fees primarily change the trading structure and participation thresholds of the market, rather than automatically "sucking in" external funds. Smoother infrastructure enhances the operational efficiency of market making, arbitrage, on-chain derivatives, and long-tail strategies, but does not directly address the question of "who will bear the new risk exposure." In other words, technology has paved the way, but the incremental capital willing to drive in is still determined by macro and regulatory environments.
● Ethereum from an Infrastructure Perspective: In the context of fluctuating Federal Reserve policy expectations and tightening liquidity, institutions are more inclined to view Ethereum as underlying infrastructure rather than a high-beta speculative target. For many professional funds, Ethereum resembles a "public base that must be understood and connected, but does not necessarily require significant accumulation," with its valuation and pricing incorporated into a broader framework of technological infrastructure and settlement networks, rather than merely a high-risk asset, which objectively suppresses short-term emotional chasing.
Bitcoin Trading Volume at a Low Point: Institutional Liquidity Actively Retreats
● Trading Volume Drops to Lowest Level Since 2022: According to a single source, the daily trading volume of Bitcoin on centralized exchanges has dropped to about 14,000 coins, the lowest level since 2022, visually creating a picture of liquidity that is almost "dried up." A waterfall-like surge in volume is hard to find, and for more time, quotes resemble stretched lines, with market hedging and directional trading momentum clearly contracting.
● Coinbase Negative Premium and Weak U.S. Demand: Meanwhile, the Coinbase Bitcoin premium index has been in negative premium territory for 10 consecutive days, around -0.1605%. In past cycles, this indicator has often been seen as a barometer of the marginal sentiment of compliant funds in the U.S., and the current sustained negative premium is interpreted by some market voices as "continuing weak demand for Bitcoin in the U.S. market." This does not mean that U.S. funds have completely exited, but rather that they are more inclined towards defensive allocations or a wait-and-see posture.
● Institutional Retreat Deepens for High-Frequency and Retail: In an environment of tightening compliance scrutiny and increasing macro uncertainty, institutions reducing directional spot positions and active market-making activities have become observable structural features. The result is that the market depth originally supported by institutional quotes has passively ceded to high-frequency and retail traders, making price spreads easier to amplify, short-term volatility more intense, while genuine "trend liquidity" has significantly shrunk, with the market overall resembling a frequent probing by small funds in shallow waters.
On-Chain Fund Migration: USDC Destruction and Token Transfer Under Currents
● USDC Destruction and Dollar Liquidity Contraction: On-chain data shows that the USDC Treasury recently destroyed about 50 million USDC. While a single data point is insufficient to explain the overall situation, observing it against the backdrop of overall dollar liquidity contraction resembles a piece of a shrinking puzzle: some dollar funds are withdrawing from the on-chain system or shifting to other more certain assets and account forms, with the contraction of on-chain dollar arbitrage reflecting that risk control gates are tightening.
● Market Sentiment from Large Pendle Transfers: OnchainLens has detected that addresses associated with the Pendle team transferred about 1.8 million PENDLE to Bybit. The brief did not provide specific motives for this action, thus subjective speculation should not be made. However, in terms of scale and flow, this event has been amplified in market psychology as a typical picture of "project tokens flowing to exchanges," heightening traders' sensitivity to token distribution and potential selling pressure.
● Funding Narrative Shifts from "Blind Accumulation" to "Withdrawal and Waiting": Viewing the destruction of 50 million USDC by the Treasury alongside the large token transfer of Pendle reveals a clear turning point in the funding narrative: capital is no longer unconditionally piling up positions on-chain, but is selectively withdrawing, observing, or seeking more certain places to dock. Whether withdrawing dollar-denominated assets or concentrating project tokens to exchanges, these actions collectively form a picture of "tokens flowing back from a widely distributed risk exposure to centralized management and liquid states."
Retail Stage Expands: Active Moments for Layer 2 and Long-Tail Strategies
● Retail Scenarios After Layer 2 Takes on Traffic: As the Ethereum mainnet shifts to a settlement layer and more execution activities are migrated, Layer 2 has overall taken on a considerable portion of the mainnet's original trading load. While specific network distribution has not been detailed in the data, a low-fee environment has become a reality. This directly lowers the participation threshold for retail and long-tail strategies: small interactions, frequent trial and error, and complex strategy breakdowns become feasible under acceptable costs, resulting in a more pronounced "diversified and fragmented" characteristic of on-chain activity.
● Bottlenecks in Prediction Markets and Fact Determination: Research from a16z points out that prediction markets still face significant bottlenecks in fact determination mechanisms—from the authority of outcome recognition to dispute arbitration processes, all remain far from fully mature. This means that even if retail participation increases, the financial infrastructure based on on-chain consensus still has institutional shortcomings: the hotter the yield narrative, the more prominent the underlying question of "who decides the winners and losers" becomes; high-performance networks can only ensure smooth transactions but cannot automatically resolve the gap in rule credibility.
● Retail and Long-Tail Games Amid Institutional Retreat: During the phase of institutional liquidity contraction, high-performance mainnets and Layer 2 have instead become the main stage for retail and long-tail funds to engage in yield narratives and speculative games. Cheaper gas fees have created space for airdrop expectations, liquidity mining, and volatility strategies, amplifying the potential for "small funds to leverage narratives." However, in the absence of substantial incremental capital to support it, this activity often resembles a high-frequency testing ground rather than a macro trend capable of driving the entire market capitalization system.
Ethereum in the Settlement Layer Era and Funding Choices in a Low Tide
Ethereum is gradually fulfilling its technical promise of "high throughput, low fees, and a neutral settlement layer": 2.88 million transactions in a single day, a relatively mild fee curve, and 30% of the circulating supply locked in the staking system collectively shape a mainnet image that resembles financial infrastructure rather than a speculative battleground. However, this technological upgrade has not simultaneously brought about a significant rebound in risk appetite—Bitcoin spot trading volume has dropped to its lowest level since 2022, Coinbase has recorded a negative premium for 10 consecutive days, and the destruction of USDC along with large token transfers outlines a current landscape where institutional liquidity is actively contracting, U.S. demand is weak, and the market resembles a competitive arena for retail and long-tail funds.
Looking ahead, the marginal changes in the macro and regulatory environment will still determine when funds truly flow back: if dollar liquidity becomes loose again and compliance frameworks become clearer, the high-performance Ethereum settlement layer and the already streamlined Layer 2 ecosystem are likely to become priority landing spots for the next round of capital inflow—whether institutions view it as an underlying financial pipeline or retail continues to build new yield narratives on it. This misalignment may just be a halftime break where infrastructure leads and capital lags, rather than the endgame.
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