‘Becoming More and More Preferred for Real Financial Infrastructure!’

While this cycle has largely been dominated by institutional interest in Bitcoin, stablecoins, and asset tokenization, Ethereum has emerged as the blockchain of choice for real financial infrastructure, not just crypto hype, Gautam Chhugani, principal analyst at Bernstein, wrote in a research note today.

Ethereum Reaches Critical Inflection Point as Blockchain Moves Beyond Speculation, Says Bernstein Analysts

“Bitcoin is great, we love it, and we still believe $200,000 is a conservative high price estimate this cycle,” the analysts wrote. “However, mainstream interest is expanding beyond Bitcoin’s ‘store of value’ role to financial innovations driven by blockchains. Ethereum deserves the love.”

US spot Bitcoin ETFs, which launched in January 2024, have become one of the most successful investment vehicles in history, amassing over $120 billion in AUM. In comparison, spot Ethereum ETFs, approved in July 2024, currently manage around $9 billion.

Modest in comparison, but increasingly significant as Ethereum’s market cap hits $300 billion, about one-seventh of Bitcoin’s $2.1 trillion size. Still, analysts argue that Ethereum’s value proposition is fundamentally different.

“Ethereum functions as a decentralized computer, core blockchain innovations like stablecoins and tokenization are unique to Ethereum where it dominates the market share,” Chhugani said.

Ethereum ETF inflows have increased sharply in recent weeks. Over the past 20 days, $815 million has flowed into Ethereum ETFs, bringing year-to-date net inflows to $658 million. The firm believes this signals a shift in narrative from crypto as a speculative asset to blockchain as a financial foundation.

“This is the stage where crypto makes the leap from meme commerce to real finance,” the analysts said. “Blockchains now power capital markets, payments, and fintech applications, and Ethereum is at the center of this transformation.”

Stablecoins, Tokenization, and Institutional Adoption The note points to the increasing adoption of stablecoins and tokenized assets among large traditional players. Visa, Mastercard, and Stripe are developing stablecoin strategies, while Coinbase, Robinhood, and Kraken are launching blockchain-based payment and tokenization platforms.

*This is not investment advice.