整理：ChainCatcher

The Ethereum treasury craze is sweeping the market. Several listed companies are continuously increasing their holdings while staking Ethereum to earn annualized returns of 3-14%.

Is this wave of institution-driven enthusiasm the beginning of a long-term allocation? How far has the bull market really progressed?

In this episode of Space "ETH Treasury Explosion in Progress, Where is the Institution-Led Bull Market Headed?" we invite guests attending this Space event, including Bruce, the investment head of Summer Ventures, Duke SHI, the head of proprietary investment at Huaxing Capital, Anthony, the ecosystem manager at Polyhedra, Jade, the PR manager/researcher at HashKey Group, Kiwi, a researcher at OKX Ventures, and Sam, a researcher at IOSG Ventures, to analyze the trends of the ETH treasury and discuss the progress and strategies of this bull market.

For the full version, click to listen to the replay: https://x.com/i/spaces/1MYxNwlMNMNKw/peek

Highlights of Key Points

• Bruce: Institutional allocation shows a long-term trend: First, the expectation of continued USD inflation means that mainstream crypto assets like BTC and ETH have certain anti-inflation characteristics; second, if the Ethereum staking ETF is approved, it will bring in a stable annualized inflow of 3-4%.
• Bruce: Ordinary investors should focus on four key institutional funding indicators: ETF net inflow/outflow, total locked value (TVL) in DeFi, stablecoin issuance, and Bitcoin market cap ratio.
• Duke: The recent rise in Ethereum is mainly driven by two factors: ETH ETF allocation and ETH treasury companies.
• Anthony: Regarding indicators for tracking institutional funding trends, I believe that besides price as a surface data, we should pay more attention to the substantive signals of capital flow.
• Kiwi: In the long term, if the supply and demand for Ethereum ETFs improve, this ratio could potentially reach 10%-20% of the circulating supply.
• Sam: In terms of market cycle judgment, when mainstream media refers to Ethereum as "digital oil," or when friends and family start asking for investment advice, it often signals a market peak.
• Jade: To seize event-driven trading opportunities, one must analyze multiple factors such as capital flow and price trends comprehensively, rather than viewing a single indicator in isolation.

Question 1: Please introduce yourselves briefly.

Bruce: I am Bruce from Summer Ventures, mainly responsible for investment and research in the Web3 field.
Duke: I am Duke from Huaxing Capital. Recently, we have focused on projects and businesses related to the integration of cryptocurrencies and stocks, RWA, payments, and Web3 financial infrastructure.

Jade: I am Jade, the PR head at HashKey, and I also serve as a researcher. Recently, I have published some market analyses in Hong Kong media.

Kiwi: I am the research head at OKX Ventures. I have been deeply involved in Ethereum ecosystem investment research, continuously conducting foundational exploration and industry information analysis. I am honored to exchange and learn with everyone here.

Sam: Hello everyone, I am Sam from IOSG Ventures. I am currently focusing on the RWA (real-world assets) sector and continuously tracking payments and AI directions.

Question 2: How do you view the trend of increasing Ethereum treasury holdings? Is it a sustainable long-term layout or a temporary liquidity event?

Bruce: This week, the ETF net inflow was $2.8 billion, significantly up from $300 million last week, indicating a rapid increase in capital activity. Historically, it has been six months since the last small bull market ETF net inflow (December 2024), and current institutional allocation is still in the early stages.

Institutional allocation shows a long-term trend: First, the expectation of continued USD inflation means that mainstream crypto assets like BTC and ETH have certain anti-inflation characteristics; second, if the Ethereum staking ETF is approved, it will bring in a stable annualized inflow of 3-4%. Compared to traditional assets, Ethereum's allocation advantages are evident, and the timing for mid-to-long-term layout has emerged.

Market indicators show that the current total locked value (TVL) in DeFi has just reached the previous bull market peak, and on-chain data and ecosystem development indicate that the bull market is in its early stages. Institutions entering the market at this time confirm that the allocation cycle has just begun.

Duke: The recent rise in Ethereum is mainly driven by two factors: ETH ETF allocation and ETH treasury companies. Data shows that major mining companies currently hold 3.57 million ETH (accounting for 2.95% of the circulating supply), with leading company Bitmine planning to increase its holdings to 5%, and some companies targeting 10%, which will require long-term large capital investments.

Although the buyback trend is clear, it should be noted that mining companies often announce their increased holdings after the price of ETH rises, and their average cost of financing through ATM issuance has reached $3,500-$4,400. Without experiencing significant corrections, the price response strategies of mining companies are worth continuous attention.

Anthony: Currently, capital is shifting towards programmable yield-generating infrastructure, and Ethereum is increasingly seen as a "digital sovereign bond" that combines programmability, liquidity, and low trust requirements.

Unlike the narrative-driven market of 2021, this round of market activity is driven by balance sheet integration (staking yields + custody solutions + ETF exposure). This reflects a fundamental shift in the holder structure: institutional capital has a longer holding period and lower turnover rate, forming a long-term structural rotation.

Kiwi: There is indeed a possibility of continued buying in the short term. Currently, Bitcoin ETFs have accumulated about $5.5 billion in purchases, accounting for 6.5% of BTC's market cap. If we consider that Bitcoin has corrected by 15%-20%, the actual proportion has reached 8%-9%. Meanwhile, the Ethereum ETF currently has only $1.2 billion in scale (excluding ATM mechanisms), accounting for 2.5% of ETH's circulating supply. This ratio is very similar to when Solana or Atom reached a staking rate of 30%-40%, but Ethereum and its derivatives (like Adobe, SSV) only slowly climbed to 20% at that time.

I believe this is strongly related to asset attributes. In the long term, if the supply and demand for Ethereum ETFs improve, this ratio could potentially reach 10%-20% of the circulating supply. After all, the overall liquidity capital pool remains abundant.

Question 3: For ordinary investors, which indicators should they focus on when tracking institutional movements?

Bruce: Ordinary investors should focus on four key institutional funding indicators:

1. ETF net inflow/outflow: directly affects market trends; net outflows often signal a downturn;
2. Total locked value (TVL) in DeFi: breaking previous highs indicates ecosystem activity;
3. Stablecoin issuance: USDT/USDC issuance reflects continuous capital inflow;
4. Bitcoin market cap ratio: dropping from 61% to 59% shows capital rotation.

The first three indicators directly reflect institutional movements, while the market cap ratio reveals the trend of capital rotation. Combining all four provides the best grasp of market pulse.

Duke: First, observe the second-order changes in ETF capital flow. Daily flow can only reflect buy-sell games, but if we observe long-term trends (like the acceleration of weekly net inflows), we can discover the true movements of institutional capital.

Another more direct indicator comes from the movements of ETH treasury companies. A large proportion of this round of institutional capital comes from the secondary market, so the continuous financing and buying behavior of mining companies actually provide ammunition reserves for the market.

I suggest focusing on:
1) Whether there are larger-scale financing plans announced;
2) The actual execution of allocations after financing.

These two relatively easy-to-obtain hot indicators in the market can serve as important supplements to the indicator system proposed by Bruce.

Anthony: Regarding indicators for tracking institutional funding trends, I believe that besides price as a surface data, we should pay more attention to the substantive signals of capital flow.

For ordinary investors, I recommend tracking three key dimensions daily:

1. ETF capital flow, which directly reflects institutional asset allocation trends;
2. On-chain staking growth, which can measure the real confidence of market participants;
3. Net outflow scale from exchanges, which often signals an increase in long-term holding intentions.

When these three indicators rise simultaneously, even if market sentiment has not yet warmed up, it means that real buying power is accumulating.

From the perspective of infrastructure construction, on-chain indicators such as cross-chain bridge activity and Rollup settlement scale are more forward-looking. These data can clearly distinguish between actual capital usage and pure speculative behavior, often sending early signals before market speculation heats up. These indicators reflecting the real usage of infrastructure are the most reliable barometers for predicting market trends.

Jade: While these indicators have reference value, it is not advisable to rely too heavily on them in actual trading. We have observed that although listed companies frequently build structures and conduct transactions through ETH, and projects like ICP and XRP engage in Z-Portfolio operations, token prices have not shown significant fluctuations.

This reflects that in the current market environment, the direct impact of institutional actions and market news on token prices is limited. To seize event-driven trading opportunities, one must analyze multiple factors such as capital flow and price trends comprehensively, rather than viewing a single indicator in isolation. It is important to understand that the news is just a small part of the market puzzle.

Sam: From my personal analytical framework, I focus more on the "active value" of ETH. This refers to the actual utility value within the entire crypto ecosystem, including the contribution of various L2 networks and their value components. As Ray just mentioned, referencing the valuation logic of the gold stock market, indicators such as NAV multiples are crucial for ETH valuation.

For institutions like ShopBank and SPET, the daily changes in ETH holdings they publish weekly can effectively help us assess the pace of institutional accumulation of ETH and potential risks.

Question 4: What factors will most critically influence the ETH market and overall crypto capital flow?

Bruce: Regulatory policies are the core driving factor of this round of market activity.** From the shift in Trump’s policies, the release of the SEC roadmap, to the passage of the stablecoin bill, the gradual clarification of the regulatory framework has directly driven capital into the market. However, it should be noted that the SEC's "crypto plan" is still in the declaration stage and has not yet formed an executable plan.

The legislative process of the "2025 Digital Asset Market Clarity Act" (Clarity Act) is particularly crucial, as it will determine the compliance prospects for assets like Ethereum and Solana. However, considering the congressional review cycle and potential black swan risks, regulation remains highly variable and requires continuous tracking and assessment.

Duke: Regulatory policies are the most direct influencing factors in the short term. The direction of U.S. policies has a leading effect on the global market, as evidenced by the market fluctuations at the end of July. The impact of macro factors is more complex; the current high debt issue in the U.S. is particularly critical. Although the development of stablecoins has temporarily alleviated pressure, fundamental issues such as debt restructuring will have long-term effects on the crypto market.

Traditional assets are centralized, but the accounting method is decentralized, and the perception of crypto asset attributes is changing. Although once viewed as a safe-haven asset, its actual performance is closer to that of high-risk assets, with volatility far exceeding that of the Nasdaq index and a high correlation with tech stock trends. This characteristic requires investors to be particularly cautious in risk control.

Jade: The most critical factor currently is the interest rate cut expectations. I focus on the data regarding interest rate cuts, such as whether there will be two or three cuts this year. Currently, the Federal Reserve is filling the liquidity gap in the stock market through overnight reverse repos, which has actually strengthened market confidence in three rate cuts this year.

However, the real challenge lies in the fact that, influenced by tariff policies and other factors, CPI data may rebound, and whether we can truly achieve three rate cuts remains uncertain. Although market sentiment is optimistic, how the specific path of rate cuts unfolds needs to be approached with a clear understanding.

Sam: From a regulatory and policy perspective, in 2024, we witnessed the approval of Bitcoin ETFs and Ethereum ETFs, and we may soon see other ETFs like Solana approved as well. In July of this year, there was also the "Genius Act" with provisions related to ETH.

As Mr. Bruce mentioned, these two pieces of legislation will have a profound impact on the valuation system. The upcoming executive order in August will also influence the pricing mechanism of cryptocurrencies.

Question 5: Vitalik recently mentioned in a public speech that Ethereum's positioning as a "global ledger" may be more aligned with the current development direction than as a "world computer." How do you interpret this statement? Does it mean that Ethereum will fully embrace Wall Street and move towards compliance?

Duke: This question directly addresses the core contradiction in the crypto space: the conflict between the ideal of decentralization and the reality of development paths. The concept of a "world computer" may lead to excessive centralization, which contradicts the original intention of decentralization when Ethereum was founded.

The deep integration of Web2 and Web3 is driving traditional assets onto the blockchain, and these assets that require centralized endorsement are more likely to gain market trust. Vitalik's shift towards the "global ledger" positioning is precisely to uphold the essence of decentralization in real-world applications.

Interestingly, the market's attitude towards Vitalik changes with price fluctuations, while he has reduced his public statements, which may indicate that Ethereum's development direction is increasingly shaped by market forces.

Question 6: How can we achieve asset appreciation and risk control, and what assets should we allocate? Can DeFi become a new growth engine, or should we still focus on mainstream assets? Will the altcoin season come in the future?

Bruce: This round of market activity is fundamentally similar to DeFi Summer, both centered around liquidity, but the driving force has shifted from protocols like Uniswap to institutional funds like ETFs.

To recreate the former glory, three conditions must be met: compliance of on-chain assets, innovative applications of stablecoins (such as the Circle model), and the combinatorial innovation capability of DeFi projects. All three are indispensable.

Jade: The essence of capital rotation is a game of chips. In the past four-year cycles, capital quickly flowed from Bitcoin to Ethereum and then to altcoins, but this time Bitcoin has risen independently for nearly a year, while Ethereum has just started, indicating that institutional entry has extended the cycle rhythm.

Once Ethereum rises to a certain stage, capital will shift towards segmented application scenarios, which aligns with the operational logic of institutions first allocating mainstream coins and then laying out the ecosystem. We are waiting for truly attractive landing applications to emerge.

Kiwi: This round of the market shows characteristics of fragmented capital pools, unlike the previous correlation between BTC, ETH, and altcoins, where the volatility of each pool has significantly decreased. This stems from players shifting to the "dollar stablecoin game," with altcoins often packaged through stablecoins to expand the capital pool. While this may trigger long-term buybacks, it essentially represents a dynamic balance between project parties cashing out and market makers profiting.

In the dollar-dominated large capital pool, trading and unloading are easier to operate. Tokens need to be linked to the dollar through ATM mechanisms to achieve circulation of sub-mainstream coins. After the FTX incident, platforms like Robinhood have welcomed development opportunities, and their buyback scale will become an industry benchmark. Compared to Binance, emerging platforms have a significant gap in unloading capabilities, while the Summort model may be most suitable for Robinhood's development.

Sam: I recommend that investors closely monitor the SEC filings of coin stocks, especially the S4 forms and Investor decks.

For example, The Ether Machine's documents indicate that when the stock price reaches specific targets, management can receive additional sellable equity incentives. Studying these documents in depth can help predict potential selling opportunities and better understand the underlying motivations during market downturns.

Jade: Besides mainstream sectors, biotechnology and other fields are also worth paying attention to. Leading companies with demonstrative effects have emerged in the RWA sector, which will drive subsequent follow-up behaviors. Although previous research on tokens has been shallow, the current cycle provides a good opportunity for deeper exploration.

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