Original Author: Alex O'Donnell
Original Compilation: Saoirse, Foresight News
The Ethereum network is gaining recognition from Wall Street, yet investors are still not fully optimistic about ETH.
In recent months, institutional adoption of Ethereum has accelerated significantly. Since May, multiple financial institutions such as JPMorgan Chase, Robinhood, and Morgan Stanley have successively launched various Ethereum-related products and services. In July, several former members of the Ethereum Foundation established the non-profit independent organization Ethereum Institutional, aiming to accelerate the adoption of Ethereum by major institutions.
At the same time, Ethereum co-founder Vitalik Buterin released a major network upgrade roadmap titled "Lean Ethereum." This upgrade aims to enhance Ethereum's privacy capabilities and resistance to quantum attacks.
However, the market has not responded positively. At the time of writing this article, ETH was trading slightly above $1,900, down more than 60% from its all-time high of around $4,950 in August 2025. Analysts generally believe it will be difficult for ETH to return to its previous highs in the short term. On July 1, Citigroup lowered its 12-month price target for Ethereum from $3,175 to $2,240, citing weaker investor demand and continued net outflows from Ethereum ETFs.
The research team at Galaxy states that the reason for the disconnect between market performance and fundamentals is clear: more and more investors are confused about the logic behind ETH's value growth.
Wall Street's Expanding Footprint
Today, institutional application of blockchain technology is no longer limited to pilot attempts, and Ethereum is one of the biggest beneficiaries of this trend.
In May, JPMorgan Chase Asset Management launched its second tokenized money market fund, JLTXX, on the Ethereum public chain. In July, online brokerage Robinhood introduced Robinhood Chain, an Ethereum Layer 2 network specifically designed for financial services and tokenized assets.
Morgan Stanley is also pushing ETH further into mainstream securities accounts. Qualified E*TRADE users can now trade and hold Ethereum, Bitcoin, and SOL.
The reason major institutions are continuously increasing their commitment to Ethereum is its mature developer ecosystem and its large-scale, decentralized validator network. Subsequent institutional deployments are likely to accelerate further.
ConsenSys CEO Joe Lubin mentioned in a statement on July 1st: The vast majority of stablecoin issuance, tokenized assets, decentralized finance, and various on-chain financial infrastructure will prioritize Ethereum.
Ambitious Upgrade Plans
In addition, Ethereum is about to undergo comprehensive technological innovation. This upgrade will further enhance Ethereum's appeal to various institutions.
In July, Buterin publicly announced the development plan for "Lean Ethereum," with the entire restructuring cycle spanning three to four years. He stated that the scale of this upgrade and overhaul is comparable to Ethereum's network-wide upgrade to a Proof-of-Stake consensus mechanism in 2022.
This upgrade aims to reduce Ethereum's usage costs, enhance network security, and optimize user privacy protection—privacy safeguards are a crucial point for institutional traders. If the upgrade is successfully implemented, Ethereum is expected to become one of the first blockchains with reliable resistance to quantum attacks.
Ethereum Foundation researcher Justin Drake stated in July that powerful security attributes will become a natural advantage in attracting global institutions to migrate to Ethereum.
Economic Fundamentals Full of Uncertainty
Positive news keeps coming, yet ETH's price remains sluggish.
One of the root causes lies in Ethereum's scaling solutions. Ethereum heavily relies on Layer 2 blockchains to achieve lower-cost, higher-efficiency transaction processing.
In theory, higher on-chain activity generates more transaction fees, which should increase market demand for ETH. However, data from L2Beat shows that since 2024, the vast majority of transactions within the Ethereum ecosystem have been handled by Layer 2 networks, which only periodically perform final settlement on the Ethereum mainnet.
Scaling solutions have significantly reduced transaction costs, helping Ethereum handle more traffic, but they have also decoupled the link between on-chain activity and ETH demand: a large number of transactions are moved off the mainnet, resulting in fewer fees earned by the Ethereum mainnet.
Researchers at 21Shares stated in January: Such changes are beneficial for ordinary users but present a mixed bag for ETH holders. Unless overall on-chain transaction volume skyrockets enough to compensate for the gap caused by declining fees, lower fees will reduce the amount of ETH burned.
Market Forecasts Show Polarized Views
Currently, Ethereum is highly likely to grow into a core infrastructure for the financial sector, but how much benefit ETH holders will ultimately reap remains undetermined. Price expectations from various industry players vary widely.
Citigroup predicts that the ETH price will likely be just over $2,000 in 12 months; Standard Chartered is much more optimistic, expecting ETH to reach $4,000 by the end of 2026 and $40,000 by 2030.
BitMine Chairman Tom Lee is even more aggressive, believing that ETH's long-term price could reach as high as $250,000, corresponding to a total market capitalization of approximately $30 trillion.
In summary, the probability of Ethereum becoming mainstream core financial infrastructure is increasing, but whether ordinary token holders can fully share the dividends of industry development remains full of uncertainty.
