The crypto market welcomes a turning point in policy and funding, ETH starts a climax of institutional layout.

I. Introduction

This week, the crypto market is greeted by two major catalytic factors: the legislative offensive of Washington's "Cryptocurrency Week" and the intensive outbreak of institutional layouts in Ethereum, together forming the "policy inflection point" and "funding inflection point" for the crypto industry in the second half of 2025. The deep logic of this crypto cycle is shifting from Bitcoin to Ethereum, stablecoins, and on-chain financial infrastructure. The clarity of U.S. policies and the institutional expansion of Ethereum indicate that the crypto industry is entering a structural positive phase, and the market's focus should gradually transition from "price games" to "capturing institutional dividends from rules + infrastructure."

2. U.S. "Crypto Week": Three Major Bills Signal Compliance Assets Will Undergo Value Reassessment

In July 2025, the U.S. Congress systematically advanced comprehensive governance of crypto assets for the first time through a legislative agenda. Against the backdrop of a dramatic shift in the global digital finance landscape and challenges to traditional regulatory models, these bills not only respond to market risks but also reflect the United States' intention to lead the next round of competition in financial infrastructure.

The "GENIUS Act" establishes a comprehensive regulatory framework for stablecoins, covering key elements such as custody requirements, audit disclosures, asset reserves, and settlement processes. This marks the first time that the stablecoin system, which has long been outside the purview of traditional financial regulation, is included within the sovereign legal structure of the United States.

The "CLARITY Act" focuses on the classification of crypto assets as securities or commodities, aiming to clarify "which crypto assets are considered securities and which are not," and to delineate the regulatory boundaries between the SEC and the CFTC. If this act is passed, it will end the long-standing "regulatory gray area" status of crypto assets.

The "Anti-CBDC Surveillance State Act" prohibits the Federal Reserve from issuing a central bank digital currency, reflecting Congress's emphasis on financial privacy and market freedom, and sending a signal that the United States supports a market-driven, technology-neutral, and open interconnected crypto asset ecosystem.

These bills collectively point to "regulatory promotion of innovation," emphasizing "clear boundaries and reduced uncertainty." The core appeal shifts from "restriction" to "guidance." After the implementation of the bills, the following impacts are expected: lower barriers for institutional investors to enter, stablecoins confirmed by policies as the role of "on-chain dollars," and compliance exchanges and custodial banks receiving policy endorsement.

At a deeper level, this is the United States' strategic response to a new round of reshaping the financial order. Stablecoins are becoming the vehicle for the digital expansion of the dollar's influence, as the U.S. attempts to inject institutional legitimacy into it through regulation. This is both a game of geopolitical financial power layout and a direct response to China's e-CNY and the EU's MiCA framework.

"Crypto Week" is not only a reevaluation of the valuation logic of crypto assets by the market, but also an institutional confirmation of technological trends by policies. This certainty in rules will gradually transform into certainty in valuation, with compliant assets, especially stablecoins, ETH, and their surrounding infrastructure, expected to become the core beneficiaries of the next round of structural revaluation.

3. ETH Institutional Arms Race: ETF Entry, Staking Mechanism Transformation, and Asset Structure Upgrade Progressing on Three Fronts

Recently, as the price of ETH has rebounded strongly, market confidence is gradually recovering. Behind this is a new round of "capital arms race" quietly unfolding around Ethereum. From Wall Street financial giants continuously increasing their positions through ETF channels, to more and more listed companies including ETH in their balance sheets, Ethereum is undergoing a restructuring of the market. This signifies that traditional capital's recognition of ETH has entered a new stage, as Ethereum evolves from a highly volatile and high-tech threshold decentralized asset to a mainstream financial asset with institutional-level allocation logic.

From on-chain data and ETF fund inflows, the institutional accumulation process of ETH is quietly and steadily underway. Since the launch of ETFs, Ethereum spot ETFs have attracted a net inflow of $5.76 billion, accounting for nearly 4% of its market cap. In the past two months, several Ethereum ETF products have recorded monthly net inflows exceeding $1 billion, with traditional financial players such as Bitwise, ARK, and BlackRock significantly increasing their holdings.

At the same time, the trend of public companies "strategic reserve Ethereum" is rising. Multiple companies, including SharpLink Gaming, Siebert Financial, Bit Digital, and BitMine, have announced the inclusion of ETH in their balance sheets, marking a new narrative turning point for ETH from a "speculative asset" to a "strategic reserve asset." Notably, SharpLink currently holds over 280,000 ETH, surpassing the Ethereum Foundation's 242,500 ETH, making it the largest single institutional holder of ETH in the world.

The current institutional participation can be divided into two camps: one is the "Ethereum native camp" represented by SharpLink, which gathers early ecosystem participants like ConsenSys and Electric Capital; the other is the "Wall Street approach" represented by BitMine, which directly replicates the Bitcoin reserve logic. This north-south pincer-type institutional accumulation model is causing the value anchor and price support system of ETH to migrate towards a mainstream capital framework that is institutionalized, long-term, and structured.

This trend not only affects prices but may also reconstruct the governance, discourse power, and ecological dominance of the Ethereum network. In the future, if companies heavily invested in ETH continue to expand their holdings, their potential influence on the direction of Ethereum's development will be significant. Although most of these companies currently still face financial pressure, their allocation of ETH is more out of speculation, hedging, and capital operation considerations, their entry has already created a magnifying effect in the capital market: ETH is being revalued, and the market narrative is shifting from the crowded lanes of DeFi and L2 to a new space of "reserve asset + ETF + governance power."

It is worth noting that Ethereum currently lacks a representative figure like Michael Saylor, who has both a faith background and traditional capital appeal, which has somewhat slowed down the trust conversion path of Ethereum in the minds of institutional investors.

However, Vitalik Buterin and the Ethereum Foundation have recently been vocal, emphasizing Ethereum's technical resilience, security mechanisms, and principles of decentralization, while also starting to strengthen the "dual-track" architecture of ecological governance mechanisms, intending to embrace institutional capital while avoiding governance power being controlled by a single force.

In summary, ETH is undergoing a comprehensive shift in its capital structure: moving from an open market dominated by retail investors to an institutional market structure driven by ETFs, publicly listed companies, and institutional nodes. This transition will profoundly impact the future construction path of ETH's price center and may reshape the governance structure and development pace of the Ethereum ecosystem. In this arms race, ETH is no longer just a representative of the tech stack but is becoming a key asset in the wave of digital capitalism, serving not only as a tool for value storage but also as a focal point for power struggles.

4. Market Strategy: BTC builds a high position platform, ETH and medium to high quality application chains welcome a rebound logic

As Bitcoin breaks through the $120,000 mark and gradually enters a plateau stage, the structural rotation pattern of the crypto market becomes increasingly clear. Under the dominant logic of BTC, Ethereum and high-quality application chain assets are beginning to welcome a valuation repair period. The current market shows a typical "large-cap platform consolidation + mid-cap rotation attack" structure, while ETH and a group of L1/L2 protocols that have both narrative and technical support have become the direction with the most gaming value after Bitcoin.

1. BTC enters the high-level platform building phase: there is support downward, but upward momentum is weak.

Bitcoin has basically completed the main bullish wave driven by the triple narratives of spot ETF, halving cycle, and institutional reserves. The current trend has entered a consolidation phase. Although it is still within a technical upward channel, the upward momentum is weakening in the short term. On-chain data shows that the number of active BTC addresses and trading volume have both declined, and the implied volatility of options in the derivatives market continues to fall, indicating that market expectations for a short-term breakout are decreasing.

The enthusiasm for traditional institutional allocation has not significantly weakened. BTC ETFs still maintain a slight net inflow, indicating that the bottom support is still present. However, as expectations have largely been fulfilled, the subsequent rise of BTC is likely to slow down or even enter a phase of horizontal consolidation. For institutions, Bitcoin has entered the "core allocation" stage, rather than continuing to chase short-term profits.

2. The logic of ETH's rebound formation: from "lost leader" to "value pit" revaluation

Compared to Bitcoin, Ethereum's performance in the second half of 2024 has been considered "disappointing", with significant price corrections and its ratio to BTC dropping to a three-year low. However, it is precisely during this low period that ETH has gradually completed valuation repricing and optimization of its holding structure. Currently, institutional recognition of ETH is rapidly increasing, with not only continuous net inflows into spot ETFs but also a growing trend of listed companies reserving ETH.

From a technical perspective, the price of ETH has broken through the previous downward trend line, starting to establish an upward channel, and has consecutively recovered multiple key technical moving average levels. Combined with the capital situation and sentiment indicators, ETH has entered a new round of market sentiment switching cycle. During the sideways movement of BTC, ETH, as a secondary mainstream asset, is gradually increasing in cost-performance ratio. Coupled with multiple factors such as L2 ecosystem expansion, stable staking yields, and improved security, the market is re-evaluating its long-term value foundation.

From the perspective of asset allocation, ETH not only has the advantage of being in a "valuation pit" at this stage, but also begins to possess institutional recognition and narrative completeness similar to BTC, combining both technical and institutional advantages, making it the preferred target for capital rotation and supplementary gains.

3. The rise of mid-to-high quality application chains: Solana, TON, Tanssi and other chains are迎来结构性机会.

Beyond BTC and ETH, the market is accelerating its shift towards mid to high-quality application chain assets that have "real narrative support". Chains like Solana, TON, Tanssi, and Sui are rapidly attracting capital in this round of rebound due to their multiple advantages of "high performance + strong ecosystem + clear positioning".

The activity level of the Solana ecosystem has significantly rebounded, with multiple on-chain applications returning to users' attention. Emerging narratives such as DePIN, AI, and SocialFi are gradually taking root in the ecosystem. Tanssi, as an emerging infrastructure protocol in the Polkadot ecosystem, is garnering widespread attention from institutions and developers by solving long-standing issues such as "the complexity of application chain deployment, high operating costs, and fragmented infrastructure" with its ContainerChain model.

As Ethereum shifts towards a more modular and data availability-optimized path, intermediate layer protocols (such as EigenLayer, Celestia) and L2 Rollup solutions (such as Base, ZkSync) are gradually releasing value, becoming an important "valuation hub" between public chains and the application layer. These protocols or platforms combine scalability, security, and innovation, and have become a new frontier for capital concentration breakthroughs.

4. Market Strategy Outlook: Focus on "Value Rotation" and "Narrative Advancement"

Overall, the capital rotation logic of this round of the crypto market has become clear: BTC is peaking - ETH is catching up - the rhythm of application chain rotation is gradually unfolding. The strategic focus in the current phase should revolve around the following points:

• BTC allocation remains, not a main focus: core holdings remain unchanged, but should not continue to chase highs; pay attention to potential policy or macro disturbance risks.
• ETH as a core rotation configuration target: technical repair + institutional narrative strengthening, suitable for medium-term allocation. If ETF funds accelerate inflow, there may be further upside potential.
• Mid-to-high quality public chains and modular protocols focus on: chains with technological innovation, strong ecological foundation, and capital supporters have the potential for sustained appreciation.
• Narrative shift forward, actively seeking new opportunities on the fringes: focus on early layout targets in DePIN, RWA, AI chains, and ZK directions. These narratives are currently in the funding pre-positioning phase and may become the core of the next rotation.

The current market has transitioned from a single asset-driven phase to a structural rotation phase, with the main upward wave of BTC temporarily pausing. The rotation between ETH and high-quality new public chains will become the key driving force in the second half of the market. Strategically, one should abandon the habitual thinking of "chasing high leaders" and shift towards a medium-term trend layout of "valuation rebalancing + narrative diffusion."

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