Hey Edge readers,

ETH is finally back in the spotlight.

After months of underperformance, ETH has broken out in a big way, outperforming BTC and the broader market. It’s not just price action that’s changing. Institutions are circling. Whales are buying. And a growing chorus of analysts say this rally might take Ethereum to new heights.

Stay sharp. 🫡

-The Exponential team

Why this ETH rally feels different

Ethereum is up nearly 40% over the past month, but the price alone doesn’t tell the full story. This rally is being supported by on-chain accumulation, institutional activity, and a shift in macro narratives that cast Ethereum as the backbone of modern finance.

The idea is simple: just as ChatGPT unlocked mass interest in AI, stablecoins are now driving adoption of crypto infrastructure. And Ethereum sits at the center of this as the main blockchain where the majority of stablecoins are settled.

With over 60% of tokenized real-world assets and the largest stablecoins operating on Ethereum, the network is positioned as the go-to layer for onchain finance. If stablecoin volume grows into the trillions, as the US Treasury projects, ETH demand could follow a similar trajectory.

Four big drivers behind the ETH breakout

1. Wall Street is going all-in on tokenization

BlackRock, JPMorgan, and Citi are no longer just talking about crypto, but they’re building tokenized financial products. And now Robinhood is entering the ring, launching a new Layer 2 on the Arbitrum stack with plans to tokenize stocks for retail investors. Whether it’s tokenized funds, bonds, or settlement rails, Ethereum and its Layer 2 chains are where this activity is happening.

2. Stablecoins are going mainstream

Stablecoins are now the biggest gateway to crypto usage. Last week’s passage of the GENIUS Act gave the U.S. its first federal framework for dollar-backed stablecoins, requiring full reserves, audits, and transparency. This opens the door for institutional adoption and product innovation, including yield-bearing stablecoins. Treasury projections now put stablecoin market cap on track to hit $2 trillion in the coming years, most of which will live on Ethereum.

3. ETH is becoming a treasury reserve asset

The MicroStrategy model is now being applied to ETH. Companies like Bitmine Immersion Technologies (led by Tom Lee) and Sharplink Gaming are accumulating ETH as a core balance sheet asset, aiming to front-run Ethereum’s role as financial infrastructure. These moves could signal the start of a trend where ETH becomes a long-term treasury reserve for digital-native firms.

4. Ethereum staking may be coming to ETFs

Several ETF issuers, including ARK and Franklin Templeton, are now lobbying for permission to stake ETH held in spot ETFs. If approved, this would introduce a new dynamic: ETFs would no longer just hold ETH, they would participate in network security and generate staking yield. That creates natural demand pressure as issuers compete on yield, and further cements ETH as a productive asset, not just a speculative one.

Is this rally sustainable?

Ethereum is starting to see a structural shift in its narrative. It’s now the settlement layer for stablecoins, the base layer for tokenized assets, the treasury asset of crypto-native firms, and potentially a yield-bearing ETF component. That’s a wide surface area, and one that’s expanding.

This rally might have more legs to it. It is a long-overdue repricing of Ethereum’s role in the next financial system.

In the news 🗞️

• BitMine targets acquiring 5% of total supply. ETH rallied 4% after BitMine revealed it had acquired 566,776 ETH, worth over $2B, just 16 days after a $250M raise. The Nasdaq-listed firm aims to own and stake 5% of the ETH supply, driving performance through staking income and treasury strategies. The news follows a surge in institutional demand, with BlackRock’s ETH ETF crossing $10B in AUM in just one year after launch.

• Ethena joins crypto treasury trend with $360M SPAC deal. StablecoinX plans to go public via a merger with TLGY Acquisition Corp. and raise $360M to accumulate ENA, the governance token of DeFi protocol Ethena. The deal includes backers like Pantera, Galaxy, Dragonfly and Polychain, and coincides with a $260M ENA buyback program by an Ethena Foundation subsidiary. ENA rallied over 65% this past week, driven by rising demand and surging USDe yields from higher perp funding rates.

• TAC launches to bridge Ethereum DeFi to TON. The new Cosmos-based layer 1 went live this week, aiming to bring Ethereum apps to Telegram’s TON ecosystem by offering an EVM-compatible chain with TON integration. TAC is not built by Telegram, but targets its billion-user reach through a cross-chain adapter and user-friendly gas abstraction. The $TAC token debuted on major exchanges, with staking yields ranging from 8-10%.

Trending 📈