Ethereum Enters the Institutional Era, ETH Reserve Race Boosts Trillion-Dollar Network Vision

Ethereum officially enters a new decade, welcoming an era led by institutions. As the world's leading decentralized programmable blockchain, Ethereum has become the preferred platform for institutional investors. With Bitcoin establishing its status as "digital gold", Ethereum's native asset ETH is also gradually being recognized as "scarce digital oil".

Recently, many institutions have increased their holdings of ETH as a long-term strategic reserve, with the "strategic ETH reserves" exceeding 1.7 million by 2025. As institutional holdings grow, ETH has become the first income-generating digital commodity.

ETH can be seen as an internet bond, and staking provides institutions with a risk-free way to accumulate returns. As the adoption rate of Ethereum increases, the scarcity of ETH enhances, and institutions begin to pay attention to the security advantages of staking and distributed validators.

Institutions generally believe that Ethereum will drive the development of the global on-chain economy, and this is one of the important catalysts for Ethereum's future growth into a trillion-dollar network.

The Era of Ethereum Institutions Has Arrived

Mainstream financial institutions are embracing Ethereum. As Wall Street discovers the innovative potential of stablecoins, DeFi, and RWA, Ethereum has become the preferred decentralized platform. Several large financial institutions are building on Ethereum, valuing its dominance in these areas along with its decentralization and security advantages.

ETH is gradually becoming a reserve asset. In recent years, a number of publicly listed companies, DAOs, and crypto foundations have begun to hold ETH as a long-term asset. Currently, over 1.7 million ETH( worth 5.9 billion USD) are locked as reserve assets, doubling in total compared to the previous year.

Ethereum is becoming the next generation of global financial infrastructure. Institutional investors are reserving ETH because they recognize that ETH is the monetary cornerstone of this infrastructure. ETH is the first digital asset that combines reliability, neutrality, scarcity, utility, and yield. BTC is the first cryptocurrency reserve asset, while ETH is the first yield-generating reserve asset.

Reasons why institutions prefer "digital oil" over "digital gold"

Bitcoin is undoubtedly the world's first digital gold. As a non-sovereign store of value, Bitcoin is highly attractive to institutions. However, Ether is a more dynamic asset because it powers the global on-chain economy. As the global economy moves on-chain, the utility and scarcity of Ethereum will increase simultaneously. Bitcoin is digital gold, while Ethereum is digital oil.

Institutions are beginning to favor digital oil over digital gold, and this trend is expected to continue. There are three main reasons:

1. BTC is a static store of value, while ETH is for participation in construction. Bitcoin has achieved success through passive storage of value. In contrast, Ethereum's success lies in its continuous and efficient output. Ethereum is the essential fuel for the world's most decentralized and secure smart contract blockchain. Since the launch of EIP-1559 in August 2021, approximately 4.6 million ETH, worth around $15.6 billion, have been burned, highlighting its role as digital oil in the on-chain economy. Currently, Ethereum secures about $237 billion in value across L1 and major L2 networks, and as the global economy moves on-chain, the demand for ETH will continue to grow.

2. BTC inflation, ETH deflation. The supply plan for BTC is fixed, with a current issuance rate of about 0.85%, which will gradually decrease. Miners will increasingly rely on transaction fees to maintain operations. Ethereum adopts a different monetary policy, linked to economic activity. The total issuance cap for ETH is 1.51%, but due to the majority of transaction fees being burned, the net issuance rate has averaged only 0.1% per year since the merge. ETH often experiences net deflation, and as the demand for Ethereum block space grows, the total supply ( is currently slightly below 120 million ETH ) and is expected to decline. In other words, as Ethereum becomes more popular, ETH will become increasingly scarce.

3. BTC has no yield, while ETH can generate interest. Bitcoin itself does not produce earnings. However, ETH is a high-yield digital commodity. ETH stakers can earn approximately 2.1% in actual returns, with no counterparty risk. As the scale of the Ethereum economy expands, the yield for validators will also increase.

Reasons Why ETH is Becoming a Leading Global Reserve Asset

ETH has several unique properties that meet three core requirements:

1. Pure settlement collateral. The new economy requires trustworthy, neutral, non-sovereign collateral assets, and ETH is just that. Besides BTC, ETH is the only "pure" collateral in the on-chain economy, with no external counterparty risk. Ethereum's $237 billion collateral value makes ETH the cornerstone of the new financial system.

2. High liquidity. ETH is the primary asset with the strongest liquidity in DeFi, similar to the role of the US dollar in traditional foreign exchange markets. The deep liquidity and broad applicability of ETH encourage institutions to accumulate ETH as a strategic asset.

3. Protocol Native Yield. ETH staking offers 2-4% risk-free returns, directly from L1 staking. This provides institutions with an efficient reserve tool that generates cash flow, directly linked to the growth of the new economic base layer.

ETH: Internet Bonds

Due to staking generating native protocol income, ETH has become the world's first "Internet Bond". Unlike traditional bonds, ETH has no maturity date, generates income permanently, and carries no counterparty risk.

ETH is a global, censorship-resistant commodity, whose returns are unaffected by traditional interest rate cycles. Even when short-term government bond yields are higher, institutions remain interested in staking Ethereum, indicating their strong conviction. If interest rates decline, these institutions can benefit from the appreciation of the underlying assets.

Institutions Compete to Hoard ETH

Cryptocurrency has established its status as a legitimate asset, and Bitcoin serves as the gateway for institutional entry. However, Ethereum is a natural evolution. Ethereum combines the value storage appeal of Bitcoin while offering native yield, and secures on-chain economies such as stablecoins, RWA, and DeFi. The strategic accumulation of Ethereum highlights this significant shift: institutions are hoarding ETH as a long-term strategic reserve asset.

Currently, approximately 1.7 million ETH( is valued at 5.9 billion USD, accounting for 1.44% of the supply, and is held as strategic reserves. Since the beginning of the second quarter, as the reserve competition has intensified, institutions have accumulated ETH far exceeding the issuance of ETH paid to validators. As the competition escalates, ETH is facing increasing deflationary pressure.

ETH: Yield-generating Asset

Institutions are adopting the Ethereum network, and ETH has become the preferred supporting asset. As government bond yields decline, the demand for ETH staking among institutions will soar, as staking can provide real returns with minimal risk. Distributed validators play a key role in this process, as institutions are very focused on security and reducing counterparty risk.

ETH staking is structurally unique, offering predictable protocol-level yields linked to network security and adoption, without borrower, counterparty, or credit risk.

For institutions seeking returns, ETH staking is the best option, as it offers nearly risk-free yields.

Distributed validators ) DVs ( solve the single point of failure problem of traditional validators and have the following characteristics:

• A single Ethereum validator is distributed across multiple nodes.
• Use distributed key generation to avoid single point private key risk
• Up to half of the nodes can go offline and still operate normally
• Achieve performance comparable to or better than traditional validators

Organizations using DV can gain advantages such as institutional-level key security, fault tolerance, middleware design, and more, without the need to hold long-tail assets.

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ETH: Trillion Dollar Opportunity

ETH is no longer a speculative asset but an institutional asset. It is the foundation of the Ethereum network, which is the cornerstone of the next-generation financial system. ETH simultaneously serves as a trustworthy and neutral store of value, settlement collateral, and income-generating reserve asset.

As adoption increases, ETH will become more scarce. As the native currency of Ethereum, ETH has a deflationary mechanism, and its supply will decrease as the network develops.

In the first decade of Ethereum, it laid the innovative foundations for DeFi, stablecoins, NFTs, and more. Entering the second decade, Ethereum steps into the institutional era. Major companies see ETH as the primary "productive" asset, and the competition to increase holdings accelerates. In this new era, the path for Ethereum towards a trillion-dollar network is unprecedentedly clear.

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