When BlackRock and JPMorgan are increasingly setting up operations in Ethereum, having zero positions is no longer a matter of "not choosing," but rather a position in itself.

Written by: Fernando Pertini

Translated by: Saoirse, Foresight News

Wall Street has started building on the Ethereum ecosystem, but the vast majority of portfolios still have zero positions.

André Kostolany has a market assertion that I highly appreciate: "In the stock market, 2 plus 2 never equals 4, but rather 5 minus 1. You just need to have a strong heart to endure this 'minus 1'."

Ethereum investors are all too familiar with this "minus 1."

After five years of consolidation and fluctuations, hope after hope has been dashed, and the refrain of "Ethereum is dead" is incessant. One new public chain after another has emerged, claiming to replace Ethereum. The market is wildly volatile, and even long-term investors cannot avoid doubting their initial choices.

This summer, the situation changed. I’m not talking about another round of emotional turbulence in the crypto community, but rather about traditional financial institutions beginning to establish Ethereum operations.

Robinhood launched an Ethereum layer two network. In just six weeks, the total locked value exceeded 1 billion dollars. Revolut, with over 80 million users, issued a euro stablecoin on Ethereum.

Two tokenized money market funds from JPMorgan Asset Management have a combined scale of over 800 million dollars on the Ethereum mainnet. Crédit Agricole issued a euro stablecoin on Ethereum and used it to settle a subscription to a tokenized money market fund from Allianz. Japan has introduced its first trust-type yen stablecoin built on Ethereum. Neuberger Berman also launched its first tokenized fixed-income fund on Ethereum.

Then BlackRock officially entered the arena. Not by releasing a podcast or throwing out another polite comment like "blockchain has great prospects," but by directly launching tangible products. BlackRock rolled out multiple Ethereum tokenized funds; soon after, it announced a partnership with JPMorgan Kinexys to tokenize part of the assets from its European institutional cash series (as of June 30, managing 311 billion dollars) on Ethereum.

Morgan Stanley launched Ethereum products with staking features. Fidelity submitted an application to add staking capabilities for its own Ethereum ETF. Open USD confirmed it was deployed on Ethereum from the start, with over 140 companies participating in the ecosystem.

When a series of events happen in succession, it is no longer a coincidence but a set of established financial architecture.

Vlad Tenev referred to it as the global tokenization supercycle. Tom Lee’s view goes further: the term "tokenization supercycle" may underestimate the upcoming transformation. I believe he has a point.

Tokenization is merely the visible first layer of change. Behind it are stablecoins, programmable collateral, around-the-clock trading markets, and instant settlement. Looking ahead, AI entities could autonomously complete transactions, negotiate, and make payments to each other. No longer bound by bank operating hours, free from the T+1 settlement mechanism, phrases like "the wire transfer is expected to arrive tomorrow" are unlikely to be heard, and human intervention to trace transfer directions will likely not be needed.

Does it sound familiar?

The first wave of AI trading revolved around computing power. The next round may very well need currencies that are intrinsically rooted in software systems.

Bitcoin has helped Wall Street understand the value of digital scarcity; Ethereum will help Wall Street grasp the value of programmable capital.

This next point is quite thought-provoking.

On July 1, the price of Ethereum was about 1560 dollars, rising to about 2450 dollars by the end of August, a significant increase. Major institutions are expanding the scale of their operations surrounding Ethereum, and the products launched are becoming increasingly specialized, with application scenarios moving beyond theoretical projections. Yet, the Ethereum actually held by traditional institutions remains pitifully small.

For many years, having no allocation to Ethereum in a portfolio was the safest professional choice in the finance industry. No one would get fired for missing out on Ethereum. Fund managers don't have to explain to the investment committee why there’s no Ethereum in the portfolio.

But when BlackRock, JPMorgan, Robinhood, Revolut, Fidelity, Morgan Stanley, Crédit Agricole, and Neuberger Berman are all entering the Ethereum space, the situation is different.

There will come a day when questions from the investment committee will completely reverse: from "Why should we allocate to Ethereum?" to "Wait, can you tell me again why we have not allocated at all?"

This is the short squeeze cycle that I am truly paying attention to. It is unrelated to publicly revealed short positions, perpetual contracts, or those who trade with 50x leverage at three in the morning.

The largest short position in Ethereum may well be the tens of trillions of dollars in various portfolios that still have zero ETH holdings.

Pause and reread this statement thoughtfully.

If you actively short Ethereum, you are clear about your bearish stance. But if you manage a traditional portfolio and choose zero Ethereum allocation while the financial system increasingly builds on Ethereum, you will eventually realize that: zero allocation itself is also a position. This is precisely the most worthy aspect of the entire situation to ponder.

The winds in Washington are also changing. The focus of industry discussions has shifted from "Should cryptocurrencies be included in the financial system?" to "Well, how do we truly integrate it?"

The CLARITY Act remains undecided and may be postponed again. Almost everyone expects this.

But if the bill makes real bipartisan progress — a scenario that has occurred multiple times in American history — the situation will be drastically different. If the bill fails again, it will not cause a significant impact; but if it achieves substantial breakthroughs, it will compel institutions to quickly reassess their time expectations and adjust their positions.

My core logic does not rely on the CLARITY Act being passed; the passage will only accelerate the overall process.

Kostolany also spoke of a principle that investors often forget: the market almost never delivers returns in a straightforward line following a logic. First comes the idea's birth, followed by a long wait, often accompanied by growing pains, and long afterwards, everyone will come out to explain that the outcome was expected.

Ethereum will still encounter multiple "minus 1" corrections in the future, and I have long anticipated this.

But look at the present: Wall Street is no longer entangled in whether this underlying infrastructure is worth paying attention to; rather, it is actively building business on it. Asset allocators are still watching and struggling with whether to enter. Yet the reality remains: the vast majority of portfolios still have zero allocation to Ethereum.