The Future of Ethereum: Fundamentals, ETF, and Market Trend Analysis

Last week, Ethereum achieved a weekly increase of 26.4%, breaking through the $2800 resistance level and approaching the $4000 mark. This is the fourth significant moment in the past two years, but the nature of Ethereum may be changing, aligning more closely with Bitcoin's upward pattern. This article will analyze recent changes and future expectations from the perspective of Ethereum's fundamentals and technical aspects.

Overall, this round of ETH rise is closer to the institution-led BTC model, characterized by a combination of "two steps forward, one step back" gentle climbing and strong surges, rather than the typical retail bull market model. This pattern allows for the digestion of profit chips in a sideways manner at high positions, reducing risk indicators.

Even if the supply ratio in profit reaches the highs of previous bull markets, the institution-led rise may no longer present the retail bull market pattern, but rather tend towards the steady rise model of Bitcoin, allowing the profit supply ratio to decrease through horizontal consolidation at high levels.

Ethereum Future Upgrades and Their Impact

1. Lower the verification threshold to promote the popularization of light nodes.

The plan is to launch an optimization of the verification mechanism in the second half of 2025, gradually reducing the staking requirement from 32 ETH to 16 ETH or even 1 ETH, and introducing lightweight node verification. This will increase the staking rate to over 40%, locking up more than 48 million ETH and reinforcing the deflationary trend.

2. Achieve cross-chain liquidity integration between the mainnet and L2

Scheduled to launch by the end of 2025, aimed at breaking the barriers between the mainnet and major Layer 2 networks, with the goal of increasing the total locked value to over $200 billion, significantly improving capital utilization.

3. Reshaping the Ethereum Virtual Machine with RISC-V Architecture

It is expected to start research and development in the second half of 2025, with goals including increasing the execution speed of smart contracts by 3-5 times and reducing Gas fees by more than 50%.

4. The mainnet introduces zkEVM

The plan is to complete the mainnet deployment by the end of 2025 to mid-2026, aiming to achieve 99% of blocks verified within 10 seconds, which will drive an increase in daily Gas consumption and enhance the deflationary characteristics of ETH.

Although the Ethereum Foundation has improved its management and R&D efficiency, on-chain data shows that gas fee revenue and overall activity still lag behind the peak of the bull market in 2021. The rapid increase in ETH prices cannot be fully attributed to improvements in fundamentals or upgrade expectations.

ETH ETF Position Analysis

Since the approval of the ETH spot ETF in July 2024, the price of Ether has fluctuated around $2500, below the average buying cost of over $2800 for most institutional investors.

As of now, U.S. spot ETF institutions hold approximately 5.038 million ETH, of which BlackRock accounts for 2.461 million. BlackRock plays the role of a "stabilizer" in the price trend of ETH, and its investment decisions indirectly define the market's medium to long-term expectations for ETH.

This evolution may weaken the "crypto fundamentalism" value identity of ETH, but it brings more enduring institutional funding support.

Analysis of Old DeFi Protocols

1. Staking/LST related protocols: such as Lido, Rocket Pool, etc., earn Ethereum validation rewards.

2. Decentralized lending protocols: such as Aave, Compound, with earnings coming from loan interest.

3. DEX: Such as Uniswap V3, Curve, with main earnings coming from trading fees.

4. Re-staking/MEV Protocol: Such as EigenLayer, earning rewards by performing additional tasks.

5. Stablecoin Protocols: Such as MakerDAO, which issues stablecoins through over-collateralization or asset-backed support.

6. Re-staking LST yield aggregation protocol: such as Pendle, enhances LST yield through strategy automation.

7. Real Asset ( RWA ) Protocol: Like Ondo Finance, introducing off-chain debt rights to generate income on-chain.

Old DeFi projects may achieve higher gains during the rise of ETH, but they require higher demands from retail investors. In contrast, the logic of ETH itself is clearer, with the advantages of ETF capital support and a gradually implemented technology roadmap.

ETH ETF Staking Analysis

BlackRock has applied to introduce a staking feature for ETH ETFs, which is seen as a signal of entering the yield optimization phase. In the future, ETH staking may be conducted through multiple third-party service providers, but a dedicated pool must be established for segregated management.

Staking income will be regarded as ETF trust income, and the issuer can manage it fully. This may increase the potential yield of the fund and the issuer's profit margin, but it is also necessary to be vigilant about the asymmetry in risk-return distribution.

Short-term High Points and Medium to Long-term Trend Analysis

As of July 18, 2025, the proportion of floating profits in ETH reached 95%, approaching historical highs. This highly concentrated floating profit state often occurs during periods of local market overheating, indicating that short-term trading sentiment may be overly saturated.

At the same time, on-chain data for Bitcoin shows that the total realized profit has reached 4.3 billion USD, and long-term holders are starting to release their chips to the market. However, the BTC price has not shown a significant correction, indicating that market buying remains resilient.

Bitcoin is forming a "repeated fluctuation → chip accumulation → breakthrough turnover" stable upward structure. Under this structure, as long as there are no major external bearish factors, the price of Bitcoin will maintain strong stability, which also provides indirect support for ETH.