Macro Research Report on the Crypto Market: ETH Welcomes the Pricing Power of Financial Assets Era

Summary

On August 7, 2025, the United States officially signed an executive order allowing 401(k) retirement plans to invest in a diversified asset class that includes crypto assets. This marks the most structurally significant institutional upgrade since the Employee Retirement Income Security Act (ERISA) of 1974. The relaxation of policies, combined with the entry of long-term funds such as university endowment funds, Wall Street narrative-driven investments, accelerated inflows into ETFs and futures markets, and macro tailwinds from the Federal Reserve's interest rate cut expectations, collectively propel Ethereum to gain funding momentum and pricing power that surpass Bitcoin in this market cycle. This article will systematically analyze the deep logic of ETH's transformation into financial assets from the dimensions of institutional breakthroughs, institutional layouts, and market narrative evolution, while also looking ahead to the structural opportunities and investment strategies for the coming months. As of now, the global cryptocurrency market's total market capitalization has exceeded $4 trillion, setting a new historical high. Compared to about $1.08 trillion at the beginning of 2023, it has nearly quadrupled in less than three years, reflecting the explosive power of the market driven by institutionalization and the push for institutional involvement. According to CMC data, the market capitalization rose by approximately 8.5% over the past week, with a cumulative increase expected to be in the range of 10–12% over two weeks. This trend is not driven by a single market cycle but is the result of a combination of institutional policy support, changes in institutional allocation, market structure optimization, and narrative catalysis. This research report will focus on three main lines—policy catalysis, institutional confidence endorsement, and narrative and market structure—delving deeply into the logic of the ETH bull market and future pricing paths, and providing investors with a comprehensive perspective through historical comparisons, data modeling, and risk analysis.

1. Policy Catalysis: 401(k) The Structural Significance of Openness

1.1 Historical Context: The Pension Revolution from Stocks to Crypto Assets

We look at this time's 401(k) open cryptocurrency assets within the context of over a century of evolution of U.S. pensions, and the weight will be clearer. The last "paradigm shift" occurred after the Great Depression. At that time, pensions were mainly fixed income (DB) systems, with funds "nailed down" in government bonds, high-quality corporate bonds, and municipal bonds by the "Legal List", with one logic — safety first. The stock market crash in 1929 shattered corporate cash flows, and many employers were unable to fulfill their obligations, forcing the federal government to provide a backstop through the Social Security Act; after the war, bond yields fell sharply, with municipal bonds once dropping to around 1.2%, completely unable to cover the long-term promised returns. It was also in this imbalance of "safety and return" that the "Prudent Man Rule" was reinterpreted in the 1940s and 50s: it was not just "only allow buying the safest", but rather "the overall portfolio must be prudent", leading to limited inclusion of stocks. In 1950, New York State allowed pensions to allocate up to 35% to equity assets, followed by states like North Carolina; there was considerable opposition — "gambling with workers' hard-earned money" — but history chose growth. In 1974, the Employee Retirement Income Security Act (ERISA) incorporated the modern framework of "prudent investment" into national regulations, deeply binding pensions to the capital markets, and the subsequent long bull market in U.S. stocks and modernization of the financial market all have this institutional footnote.

On August 7, 2025, Trump signed an executive order that shifted the "risk-return rebalancing" pendulum back to the forefront: the 401(k) plan can invest in private equity, real estate, and for the first time, include cryptocurrency assets; it also requires the Department of Labor to collaborate with the Treasury, SEC, and other agencies to assess whether rule modifications are necessary and how to provide a "menu" of alternative assets and compliance convenience for plan participants. This is not an isolated "policy benefit" but rather the most structural upgrade to the pension system since ERISA: incorporating digital assets, which are still in the early stages of high volatility, into the optional category of the core retirement account for the American middle class — the 401(k). It directly answers two questions: first, do cryptocurrency assets qualify for long-term holding by institutional funds? Second, who will endorse this qualification? The answer is straightforward — a "national-level" framework and the American pension system.

1.2 401(k) System Analysis and Capital Potential Assessment

To understand its magnitude, it is necessary to shift the perspective from "news" to "asset pool." The U.S. retirement system operates on three parallel levels: Social Security, Individual Retirement Accounts (IRA), and employer-sponsored defined contribution (DC) plans, with 401(k) being the absolute centerpiece of DC. By March 2025, the total assets of all employer-sponsored DC plans are estimated to be around $12.2 trillion, with approximately $8.7 trillion in 401(k), covering nearly 60% of American households. The investment channels of 401(k) are primarily in mutual funds, with about $5.3 trillion allocated to mutual fund accounts, including $3.2 trillion in stock funds and $1.4 trillion in mixed funds; this indicates that even within the "pension" framework, the risk tolerance and pursuit of returns in the U.S. have long transcended the old world of "only buying bonds." The executive order now opens the door to adding "crypto assets" to the menu, alongside stocks, bonds, REITs, and private equity.

Converting "possibility" into "scale" allows us to understand how big this door is. Assuming that only 1% of the 401(k) asset pool chooses to allocate to crypto assets, it theoretically means about $87 billion in medium to long-term net buying; if it's 2%, that's $174 billion; and at 5%, it's about $435 billion. Now let's compare that with the reality we can see: since the beginning of this year, the net inflow into Ethereum spot ETFs has accumulated to about $6.7 billion, while in just two days after the executive order took effect, the ETH ETF saw an additional $680 million in net inflow.

Why has the price reaction of ETH been significantly stronger than that of BTC this time? If we only look at the "news-price" comparison on the same day, we might misjudge that the market is "consuming stories." By piecing together the on-chain and off-chain dimensions, we get a more complete picture. First is the "capacity for funding": ETH's price base is lower, and its ecological applications are broader (DeFi, stablecoin settlement, L2 settlement, RWA tokenization), making it more friendly to the story of "long-term funding-productization"; second is the "readiness of the product": with the Bitcoin ETF having been operational for more than a year, the Ethereum spot ETF naturally inherits the funding and compliance framework, and the "shortest path" for the executive order to take effect is to "replicate from IBIT to ETHA"; third is the trading structure: after the executive order was announced, CME ETH futures annualized basis briefly reached over 10%, significantly higher than BTC, and the "contango" in the term structure provided a clearer path for funding to hedge and leverage; finally, is the "dominance of narrative": over the past two months, BitMine has established itself as "the largest ETH treasury company" in 35 days through a rhythm of "disclosure-funding-increasing positions-re-disclosure," and has transformed off-chain structured tools (OTC design provided by Galaxy + on-chain delivery + custodial settlement) into a reusable template; Tom Lee's target price of "$15,000" spread this template from institutional circles to the media and retail investors, compounded by verifiable data of $680 million net inflow into ETFs over two days, making the narrative a form of "self-verification." This is not about "storytelling driving prices," but rather a closed loop of "structural design connecting funding-price self-verifying-narrative passively reinforcing."

Of course, equating "national endorsement" directly with "risk-free appreciation" is dangerous. The coupling of technology and regulation for crypto assets is still in a "transition zone": on-chain event risks (contract security, cross-chain bridges, oracle manipulation), macro policy uncertainties (anti-money laundering, stablecoin regulatory frameworks, tax system standards), and judicial risks (the boundaries and proof obligations of fiduciaries being sued) can all trigger "unexpected" repricing in a single event. The "low turnover" of pensions helps reduce volatility, but if the product design does not address "redemption gates," "premium/discount management," and "liquidity survival in extreme market conditions," it may instead amplify shocks during stress tests. Therefore, true institutionalization is not just about "buying it in," but also "managing it": insurance pools and compensation clauses, the triggering conditions for catastrophic events, auditing and evidence collection processes, on-chain transparency and traceability must all align with the "operational risks" that pensions can afford on the same dimension.

Returning to the asset level, this policy's "structural benefits" for ETH are also reflected in both supply and demand. On the demand side, we have already seen: the "re-acceleration" of ETFs, the futures premium on CME, and the sample diffusion of treasury companies and donor funds; on the supply side, staking has locked the originally "active and tradable" ETH into "yield-bearing staking assets", while EIP-1559's burn mechanism has kept the "net issuance" during the active period very low. A market characterized by "drip-feeding long money demand + reduced/locked supply" will naturally produce the curve features of a "slow variable bull market"—not a sharp daily surge, but a gradual uplift and convergence of quarterly pullbacks. This also explains why BTC only rose about 2% on the day of the executive order, while ETH quickly surged and recorded a two-day net inflow of $680 million into ETFs: the market prices the "institutionalizable growth" more in assets with multi-purpose settlement layers and characteristics that can be embedded into financial products.

Finally, let’s translate "scale" into "pathway". In the short term, the first reflections of policies will still be in the secondary market ETFs and over-the-counter structured products (total ledger easy verification, risk control that can be implemented, and custodians that can provide insurance); in the medium term, some target risk funds/balanced funds may attempt to embed "crypto factors" in small proportions; in the long term, if the Department of Labor and SEC provide clearer QDIAs that can be accommodated, only then will the true "passive" crypto allocation appear in the default investment of 401(k). This pathway does not require "national frenzy"; what it needs is product compliance, verifiable risk control, insurable custody, and verifiable disclosure of "pension-level engineering". When these links are connected, 401(k) will turn "possibilities" into "net buying power"; and when net buying power steadily flows into a network asset with gradually shrinking supply elasticity at a low frequency of 0.5 times/month over several years, a "new equilibrium" of price and volatility will also emerge—this will not just be a "market trend", but an upgrade of an asset class.

II. Institutional Confidence Endorsement: The Crypto Layout of University Donation Funds

University endowment funds, which possess the "perpetual capital" attribute similar to pensions, are moving cryptocurrency assets from peripheral experiments to the forefront of institutional allocation. Their asset-liability goals are intergenerational—aiming to achieve long-term real returns of "inflation + α" through diversified portfolios while adhering to an annual spending rate of about 4%-5% and maintaining purchasing power against long-term inflation erosion. Common characteristics of such funds include long duration, low turnover, and extreme sensitivity to compliance and fiduciary responsibilities: any new asset must cross three thresholds to enter the investment committee's "core menu"—legality and custodial feasibility, valuation and audit verifiability, and collaborative and diversification value with existing assets in the cycle. Therefore, the exposure to Bitcoin (and by extension, Ethereum) disclosed by a group of leading U.S. universities in 2024-2025 in their disclosure documents and public communications carries significant weight: this is not a pursuit of short-term trends, but rather a vote from long-term capital on "whether it is worth including in the strategic asset pool."

From a timeline perspective, the paths of this group of institutions are largely consistent: around 2018, they established indirect exposure through crypto-themed venture capital funds with a "research-small pilot" approach. Around 2020, they attempted small-scale direct holdings on exchanges or through over-the-counter channels, forming operational experience. Since 2024, with the maturity of spot ETFs and custody auditing systems, they have begun to include products with fair valuation, intraday subscriptions and redemptions, and significant liquidity in their disclosure forms. Harvard University is the most symbolic example to date: the Harvard Management Company (HMC), managing approximately $50 billion, disclosed in its latest 13-F filing that it holds about 1.9 million shares of BlackRock iShares Bitcoin Trust (IBIT), valued at approximately $116 million at the market price for that quarter, ranking among the top five publicly disclosed holdings alongside Microsoft, Amazon, Booking Holdings, and Meta, even exceeding its holdings in Alphabet. Placing Bitcoin ETFs in the "same competitive product" lineup represents a shift in pricing power itself—in Harvard's asset view, it is regarded as something that can be valued, rebalanced, and can form a dual anchor against inflation and growth alongside gold and growth stocks. A more detailed signal is that Harvard simultaneously increased its allocation to gold ETFs (publicly reported as approximately 333,000 shares of SPDR Gold Trust, about $101 million), indicating that its portfolio strategy is not about "abandoning the old for the new," but rather balancing geopolitical friction and dollar liquidity's cyclical volatility through a parallel approach of "commodity anchor + digital anchor": when gold strengthens as a "crisis hedge," Bitcoin enhances its role as a "liquidity easing and institutionalization process" beta, and the correlation between the two will alternately reduce the tail risk of the portfolio in different macro stages. The first American university to really "speak out" was Emory University. On October 25, 2024, Emory publicly disclosed for the first time that it held nearly 2.7 million shares of Grayscale Bitcoin Trust (GBTC), valued at approximately $15.1 million at that time; as Bitcoin prices rose over the following year, the nominal value of this position once approached $30 million.

The institutionalization of crypto assets does not solely stem from established giants, but also from new institutions redefining the narrative. The University of Austin (UATX) announced in February 2025 the establishment of a Bitcoin special fund exceeding $5 million, to be included in its endowment fund management, with a clear holding period of at least five years. The case of Stanford showcases the cutting-edge momentum of "on-campus investment culture." Although the university's endowment fund has yet to disclose its holdings in crypto assets, the student-run Blyth Fund decided in March 2024 to invest approximately 7% of its portfolio in IBIT, when the price of Bitcoin was around $45,000. Blyth is not part of the formal endowment fund, but merely a portion of the university's discretionary fund pool, with an asset scale of only several hundred thousand dollars. However, it reflects the future managers' risk awareness and tool capabilities—these students embrace new assets through the "pension-grade" tool of ETFs within a real investment framework, and this methodology will naturally transfer when they enter large institutions in the future. As for traditional top-tier institutions like Yale, MIT, and Michigan, their style is more "steady and invisible."

If these scattered actions are placed on a chart, several clear logical clues can be found. First, path dependence: almost all universities tend to enter through ETFs/trusts to avoid direct private key custody and operational risks; second, scale and pace: starting with small amounts to validate processes and risk control, and then discussing whether to upgrade to the level of "strategic allocation" based on volatility, correlation, and drawdown performance; third, the role of the combination: Bitcoin takes on more of the role of "digital gold", serving as a vehicle for macro hedging and liquidity β; Ethereum, on the other hand, is gaining increasing attention in narratives such as "financial markets on-chain", "on-chain settlement layer", and "RWA tokenization infrastructure", especially after the spot ETF channel and 401(k) menu opened, its capacity is gradually approaching that of Bitcoin from an institutional perspective. It is under this combination logic that we see a net inflow of $680 million into ETH two days after the executive order was issued, and the CME ETH futures premium is higher than the structural difference of BTC: when "long money" evaluates which asset is more like "an asset that can be embedded in financial product systems", ETH's multi-use attributes and its outputs (staking rewards, MEV distribution, etc.) give it stronger marginal elasticity.

It is worth noting that university endowment funds and pensions represent the same kind of "long money culture." The former embodies the intergenerational mission of the academic community, while the latter represents the retirement security of the middle class in society. Therefore, simply interpreting the entry of university endowment funds as "chasing the rise" is a misunderstanding. They are more like experimental fields for "integrating crypto assets into long-term balance sheets": using the most quantifiable ETF as the entry point, rigorously testing through the strictest fiduciary processes, and positioning crypto assets within the coordinate system of "gold - growth stocks - high-quality bonds"; if the drawdown is bearable, correlation can diversify during crises, and cash flow (which for ETH refers to staking income) can be measured, then the weight may potentially rise from "basis points" to "percentage points." Once this migration appears repeatedly in disclosures from more universities and over more quarters, it will no longer be "news" but will become "common knowledge." When this common knowledge meets the institutionalized "drip irrigation" of 401(k), a "strategic coin hoarding pool" at the market bottom begins to take shape—quiet, but powerful.

3. Narrative-driven and the transfer of ETH pricing power

If we say that the pricing power migration of this round of Ethereum is the "invisible hand," then the back of the hand is a series of real money, and the palm is the meticulously arranged rhythm of information. The most evident division is the parallel and forking of two capital paths: on one end is the OG logic represented by SharpLink—low cost, long cycle, on-chain fundamentals, information closed loop, trading time for space; on the other end is the Wall Street approach represented by BitMine—structured financing, rhythmic disclosure, media positioning, and price resonance, leveraging structure to amplify time. Both are "buying ETH," but their methodologies point to two completely different pricing systems: the former believes that price will revert to value, while the latter actively carves the value narrative into the price.

The story of SharpLink starts with holding costs. It is backed by shareholders such as Consensys (with Lubin as the chairman), Pantera, Arrington, Primitive, Galaxy, GSR, Ondo, etc., which cover the infrastructure and financialization chain, passively ensuring a closed-loop capability of "buy-manage-use-custody-derivative." Its early positions primarily came from internal transfers within the team’s wallet rather than the public market, with a small unit scale and an extremely long distribution period, emphasizing security, liquidity, and audit coordination, with a comprehensive cost range of $1,500–$1,800, and some even lower than $1,000. This "coin hoarding mentality" brings two predictable outcomes: first, when the price returns to around $4,000, the historical chips naturally facing selling pressure is almost institutional; second, the information disclosure is somewhat "wait for the financial report," as shares can be sold at any time after the S-ASR submitted on June 12, 2025, takes effect, further reinforcing the committee's style of "slow is stable." When applying this path to the question of "who defines the price of ETH," the answer is: the on-chain native community and time.

BitMine took 35 days to bring another answer to the table. The timeline is as clear as a script: from July 1 to 7, PIPE financing of $250 million was secured, revealing the first batch of about 150,000 ETH entering storage; from July 8 to 14, an additional 266,000 ETH was added, bringing the total holdings to over 560,000; from July 15 to 21, another 272,000 ETH was added, totaling 833,000 ETH. It did not wait for the quarterly report, but instead used an "intermittent" official website, media, and IR letters to slice the rhythm weekly, precisely releasing a strong signal of "we are continuously buying in large quantities"; at the same time, Galaxy Digital provided a toolchain of "OTC structural design + on-chain delivery + custodial settlement" to ensure efficient absorption without significantly pushing up slippage; more importantly, the disclosed average purchase price was about $3,491, avoiding the peak stage and hitting the sensitive threshold of a new round of rising channels.

The reason why this strategy is effective is that it precisely grasps the generation mechanism of Narrative: First, the rhythm of time - breaking information into high-frequency fragments, allowing the market to have "no gaps" in continuity, reducing narrative entropy increase; Second, the narrative container - packaging ETH from a "technical platform token" into a "priceable, tradable, and cashable" financial asset, inventing a set of relevant indicator language, such as ETH-per-share, analogous to "earnings per share", combining on-chain staking returns, burn rates, and net inflows of spot ETFs into a model that can be communicated to sellers, buyers, and the board; Third, measurable validation points - solidifying expectations with specific numbers: average purchase price of $3,491, 830,000 pieces in three weeks, stock price 9 times, CME futures annualized premium > 10%, and "net inflow of ETH ETF of $680 million in the two days after the executive order" as such "anchor points", allowing media and institutional research to cite the same set of gauges; Fourth, channel positioning - the coordination of IR letters, mainstream financial media, and short videos on social media, making the narrative effective on both ends of institutions (which need models) and retail investors (which need stories). Thus, the chain of Narrative is compressed into four steps: rhythmic release → media amplification → investor FOMO → price feeding back Narrative. When the price confirms "we are indeed buying, and the price rises after buying", a new pricing power will naturally emerge.

The role of individuals in this system has been amplified to the level of "leverage on leverage." Tom Lee's value lies not in "predictive accuracy" but in "narrative standardization." His Bitcoin Misery Index (BMI), on-chain activity, volatility, drawdown depth, ETF creation and redemption, and M2 environment, among other metrics, are polished into three angles: a "sentiment dashboard" for retail investors, a "structural scorecard" for institutions, and "easy-to-understand headlines" for the media. He rarely allows for "empty windows" where there's "nothing to say" in front of the camera: at the bottom, he states, "sentiment is extremely painful, long-term holders window," during the upward trend he says, "a structural bull market is unfolding," and during drawdowns, he mentions, "the on-chain structure is repairing." What matters is not how accurate the conclusions are, but the frequency of statements, the early positioning, and the clarity of expression. When BitMine's three-week progress bar is continuously "pinned" in the media, Tom Lee articulates the target price of ETH at $15,000 in a podcast, and the 180,000 views provide retail investors with "psychological permission to act," while the institutional research department receives "external endorsement that can be written into memorandums." Following this, the CME ETH futures premium surpasses the changes in BTC's term structure, giving funds a lever to amplify using basis strategies; further on, a two-day net inflow of $680 million in spot ETFs digitalizes the "buying power." This series of "person-event-price-volume" connections makes the leap of "ETH from a technical platform coin to a financial asset" not just an aspiration within the circle, but a perceivable, quantifiable, and recountable fact in the external world.

Ultimately, pricing power is not about "who has the loudest voice," but rather "who can align prices more quickly and sustainably with a widely accepted narrative and metrics." The deepest structural change in this upward trend is not about who is "bullish" on ETH, but rather who "can explain, can support, and can deliver" ETH—the leaders of the narrative are becoming the writers of the price.

4. Summary and Investment Insights

Overall, the reason why this round of increase presents the appearance of "Ethereum being more sensitive and having a cleaner trend" is essentially due to the reorganization of capital structure at play: under the dual-track support of ETFs and derivatives, incremental buying is more easily aggregated to assets with the deepest liquidity and strongest infrastructure attributes. In the two days following the issuance of the executive order, the ETH spot ETF recorded a net inflow of approximately $680 million, combined with a previous cumulative net inflow of about $6.7 billion this year, indicating that the capital pipeline of "pension fund – brokerage window – ETF – secondary market" has become replicable.

What needs to be seen is that institutional allocation not only pursues β but also manages the maximum drawdown of the portfolio and the constraints of redemption liquidity. In terms of "carry capacity", the depth of the spot and derivatives order books of ETH is second only to BTC, and its ecological applications allow for the overlap of "non-financial demand" and "financial demand", which is the friendliest "bridge width" for passive funds. This also explains why, despite the same favorable policy announcement, BTC only rose about 2% within 24 hours, while ETH's price and trading volume expanded simultaneously, and both ETF and futures funds have provided evidence. In contrast, the "follow-up - drop out - re-differentiation" of altcoins is not an accident, but an inevitability of the market structure.

On a macro level, this structure provides a "weather for funds." In July, the weak U.S. non-farm payroll data and a slight increase in the unemployment rate, combined with hints from regulatory high-level officials about three interest rate cuts this year, led to a probability of about 88.4% for a 25 basis point rate cut in September according to the CME "FedWatch." The expectation of nominal interest rate decline raised the pricing upper limit of risk assets and enhanced the trade-off results for "long money" on medium to long-term returns/volatility. Interest rate variables are transmitted to the crypto market through two paths: first, the reduction in the discount rate directly raises the asset valuations with cash flow imagination space, with ETH benefiting more significantly under the "fee-destroy-staking yield" framework; second, the "dollar liquidity-asset reallocation" link makes U.S. stocks, gold, and BTC/ETH the first-tier recipients, with Ethereum occupying the central position in the pricing narrative due to its attributes as "financial infrastructure." This round of upward movement for ETH is not a single trading signal but a repricing of asset classes. It is opened by the "compliance channel" of pension system reform, with funds being channeled to the secondary market through ETFs, futures, and over-the-counter structures, while treasury companies, university donations, and long money accounts lower the turnover rate and create a thicker bottom. Finally, the media and research narratives standardize and disseminate the "verifiable facts." Only by understanding this logic can one grasp the core dividends of ETH's long-term value reassessment in the transition from "trading-driven upward" to "allocation-driven elevation."