Ethereum Just Flipped the Narrative — Here’s What’s Driving It
Ethereum (ETH) has been one of the best performers in the crypto market recently, driven by what Bitwise analysts describe as a “watershed moment” for the industry.
The impending change in the United States crypto legislation, including the signing of the Guiding and Establishing National Innovation for U.S. Stablecoins (Genius Act) into law on July 18, 2025, the House approval of the Financial Innovation Technology for the 21st Century Act (FIT21) on May 22, 2024, and the Digital Asset Market Structure Clarity Act (Clarity Act) on July 17, 2025, all point to a clearer crypto regulation in the United States.
While the Clarity Act and FIT21 Act bills await Senate approval as of July 24, 2025, they have both significantly contributed to Ethereum’s market appeal.
The ratio of ETH/BTC increased by approximately 40% over the past month, followed by a 6% decline in Bitcoin’s market dominance to show an upward trend towards altcoins. Derivative markets show increased activity, with strong demand in Ether futures open interest and CME futures reaching record highs on July 23, 2025, according to CME Group.
Institutional Demand Boost Ethereum’s Ecosystem
Ethereum’s dominance in tokenization and stablecoins continues to attract institutional capital. As of July 22, 2025, the network accounts for nearly 60% of tokenized real-world assets (RWA) and 50% of the $140 billion stablecoin market capitalization.
Ethereum Stablecoin Supply (Source: Token Terminal’s X)
Institutional investors are building up ETH holdings as well: Bit Digital acquired over 100,000 ETH valued at $375 million, BTCS Inc. holds 29,122 ETH—up 221% since late 2024—BitMine Immersion Technologies holds 300,657 ETH, and SharpLink holds 280,706 ETH.
Ethereum exchange-traded products (ETPs) recorded $2 billion in inflows since July 4, 2025, according to market data, with treasury holdings supported by transactions like The Ether Machine (DYNX), which holds $1.6 billion in ETH.
Staking and ETFs Shows Growth Potential Following Regulatory Uncertainty
Institutional demand in Ethereum staking is increasing, with 27% of the ETH supply staked and funds holding 3.3 million ETH, approximately 3% of the supply, through ETFs.
Staking ETFs, expected by Q3 2025, could bring up to $20 to 30 billion USD annually, adding between 3% and 4% yield to spot ETH ETFs, which saw $2 billion in inflows since July 4, 2025, including a peak of $727 million on July 17, 2025.
Following the bullish momentum, regulatory barriers still remain. The SEC approved and subsequently blocked Bitwise’s BITW crypto index fund conversion to an ETF on July 22, 2025, due to regulatory concerns, though this was not specific to ETH ETFs.
Bitwise remains optimistic, emphasizing Ethereum’s role in decentralized finance (DeFi) and scalability.
