The stocks of ETHEREUM DAT will receive considerable buying interest, but what about ETH?

Written by: Eric, Foresight News

This week, FTSE Russell announced the preliminary selection list for the Russell 3000 index in 2026, which has added several cryptocurrency concept stocks, with CoreWeave (CRWV), Iren Limited (IREN), and Galaxy Digital Holdings (GLXY) appearing on the new list.

Additionally, the Ethereum DAT company BitMine (BMNR) and Sharplink (SBET) as well as the SOL DAT company Forward Industries (FWDI) are also included. If no surprises occur before June 29, the billions of dollars in passive funds tracking the Russell index will have to allocate these stocks, regardless of the personal views of fund managers towards cryptocurrencies.

This is undoubtedly good news for investors in cryptocurrency concept stocks, but it is hard to say the same for the cryptocurrencies themselves.

What is the Russell Index?

The Russell Index system is managed by FTSE Russell, a subsidiary of the London Stock Exchange Group, and is one of the most influential benchmarks for U.S. stocks globally. The Russell 3000 index covers the top 3000 companies by market capitalization in the U.S. stock market, representing approximately 98% of the U.S. investable equity market. Two core sub-indices derived from it are: Russell 1000 (large-cap stocks, the top 1000 companies) and Russell 2000 (small-cap stocks, the bottom 2000 companies), which are also important components of the capital markets.

Every June, FTSE Russell conducts a comprehensive adjustment based on market capitalization data from the end of April. Starting in 2026, this frequency will increase to twice a year (June and November) to reflect market changes more quickly.

As of 2026, approximately $20 trillion in assets are benchmarked to FTSE Russell indices, with around $10.6 trillion of that residing in the Russell U.S. index system. This means that any company entering the Russell index will immediately become a target for massive passive fund allocation.

Funds that track the Russell index primarily come from two types of products: ETFs and index funds. Taking the Russell 2000 as an example, the largest tracking tool is BlackRock's iShares Russell 2000 ETF (IWM), which has an asset management scale of about $75 billion and a daily trading volume exceeding 26 million shares, making it one of the most liquid small-cap ETFs in the world. The second is the Vanguard Russell 2000 ETF (VTWO), managing approximately $13.6 billion in assets, with a fee rate of only 0.07%, making it a favorite for long-term passive investors. There are also numerous institutional products like the Vanguard Russell 2000 Index Mutual Fund (VRTIX) and BlackRock's Russell 2000 Index Fund.

The management style of these funds is "passive management": their sole goal is to replicate index performance as accurately as possible rather than actively selecting stocks. Therefore, when a stock is included in the index, these funds must buy according to its weight after the adjustment takes effect; conversely, excluded stocks are forcibly sold. This mechanism makes Russell index adjustment days (typically the last Friday in June) one of the highest trading volume days in U.S. stocks throughout the year, with the closing trading volume on the adjustment day in 2024 setting a record of nearly $220 billion.

Historical data shows that companies included in the Russell index typically experience significant price fluctuations before and after the adjustment. According to multiple studies, companies newly added to the Russell 2000 can average a price increase of 5%-10% in the short term immediately after the adjustment takes effect, entirely due to the forced buying by passive funds. For cryptocurrency concept stocks like BitMine, which have relatively small market caps and lower liquidity, this effect may be even more pronounced.

For DAT companies, the stock price increase driven by passive buying is more favorable for issuing stocks to acquire more cryptocurrencies. If confirmed to be included in the Russell index, what used to rely on hype to achieve the "flywheel" can now be realized with the push of passive funds.

DAT company stocks benefit, ETH itself may not

Just days before the Russell index list was announced, David Hoffman, co-founder of Bankless and one of the most influential voices in the Ethereum community, liquidated all of his ETH holdings.

Hoffman's explanation was not due to a bearish outlook on the Ethereum network itself; on the contrary, he stated he is "extremely optimistic about the future of the Ethereum network," with the issue being the core narrative that "ETH is currency." In Hoffman's view, Ethereum is essentially "a giver rather than a taker"; it provides the most secure block space to the world at cost, tokenizes global assets at cost, and protects billions of dollars in DeFi protocols at cost. "All transactions are free of charge" is the essence of open-source software and is where Ethereum's power lies, but this directly contradicts the logic of "token appreciation."

Hoffman candidly stated that Ethereum is the most successful nonprofit organization in human history, but structurally, Ethereum does not prioritize ETH. This is not a flaw but a characteristic. He believes that the success of Ethereum's network and its ecosystem only reflects a small portion in ETH's price. The application layer and L2 services are capturing the majority of value, with centralized rollup routes meaning L2 captures 97% of the profits, while ETH gets only a tiny share.

This reveals a structural dilemma. The stock price of DAT companies can obtain independent valuation increases through the rules of the traditional financial system (index inclusion, institutional allocation, stock premium), even trading at a premium relative to their held crypto assets. However, when these companies obtain capital in the secondary market, these funds do not flow directly into ETH itself.

Given that the market cap of DAT companies is not high, the amount of passive allocation inflow may not be large, and the increase in stock price is likely to be very limited. On the other hand, both Ethereum and Solana are currently facing the challenge of token prices; the buying interest brought by DAT companies may offset some of the selling pressure but cannot prevent the fundamental issue that the market cannot assign a higher valuation to public chains.

In August 2025, Ethereum reached a historic high of nearly $5000, while currently, Ethereum's price is around $2000. During the 9-month period when the price fell nearly 60%, BitMine itself had bought 3.6 million to 3.7 million ETH, but this did not stop the relentless decline in prices.

Conclusion

The opening of the Russell index to cryptocurrency companies is undoubtedly another milestone in the integration of traditional finance and the digital asset world. For companies like CoreWeave, Iren, and Galaxy, this means broader institutional recognition, more stable capital inflows, and higher market liquidity. However, when DAT companies face the same capital inflows, the results may not benefit the underlying cryptocurrency assets.

Currently, the narrative of "ETH is currency" is giving way to the reality that "ETH is public infrastructure," as is the case with a series of public chains like Solana. The rise in chain income and expectations of buybacks may temporarily lift token prices, but such logic has an invisible ceiling. How to introduce new narratives for token value may be the most pressing issue to consider now.