Trend Research: "Buying ETH" has become a clear signal for institutions, and its market capitalization will eventually surpass BTC.

Source: Trend Research

Original Title: Trend Research: "Buying Spree" Becomes Consensus, Long-term ETH Market Value Will Exceed BTC

Since ETH entered this round of bullish cycle, every time there is a short-term fluctuation adjustment, the market begins to spread the data situation of ETH unstaking. However, from the perspective of supply and demand, the demand generated by institutional consensus currently far exceeds the supply from unstaking, and we believe that a long-term fully loaded unstaking situation is not sustainable. Since the treasury companies represented by SharpLink began to buy in, companies holding ETH in the US stock market have now held nearly 20 billion USD worth of ETH, accounting for 3.39% of the total supply, among which Bitmine is still 75% away from achieving its target of holding 5% of the total ETH. In the future, as cryptocurrency-friendly policies are further implemented and Wall Street reaches a consensus on the long-term value of ETH, the "buying spree" for ETH has just begun. With the upcoming interest rate cut cycle, we are raising our long-term price target for ETH, believing that ETH's market capitalization will surpass BTC in 1-2 bull-bear cycles.

1. Unpledge Data

After the Ethereum Pectra (Prague+Electra) mainnet upgrade takes effect in May 2025, the theoretical exit rate for staking will be pegged to the amount of ETH and capped at 256 ETH/epoch (1 epoch ≈ 6.4 minutes). Converted to a daily figure, the theoretical maximum would be 256 × (1440 ÷ 6.4) = 256 × 225 = 57,600 ETH/day.

Since July 18, the unstaking situation on the ETH mainnet has been in a state of full queue. Currently (as of August 24), there are 873,849 ETH waiting to be unstaked, which will take 15 days and 4 hours to process.

The weekly limit for ETH unstaking is capped at a maximum of 57,600*7=403,200 ETH. Last week, the ETH treasury company purchased 531,400 ETH. Under the condition that the treasury company continues to buy, even if 100% of the unstaked portion enters circulation, it can be completely absorbed. We believe that the current network value of ETH is not fully recognized by the market, and the unstaked ETH does not fully enter circulation. As consensus further develops, the fully loaded state of unstaking will also improve.

In simple terms, unlocking staking does not represent the complete market supply situation. Although the total amount of unlocked staking shows a certain negative correlation with the rise in ETH prices, we believe that this supply will not dominate ETH's transition from a bullish to a bearish market.

2. Analysis of Demand for Treasury Companies and ETFs

In June 2025, ETH treasury companies represented by SharpLink began to enter the market, confirming our previous speculation that the U.S. would make ETH the primary battleground for financial on-chain infrastructure (for specific details, see our articles "Why We Are Optimistic About ETH Before the Surge" published on June 11 and "The Market's Collective Force Will Drive ETH to Discover Its Value" published on July 3). The entry of institutional-level purchasing power represented by treasury companies fundamentally changed the dominant forces behind ETH price fluctuations.

1. The Operating Logic of the Financial Repository Company - Accumulating Coins Leads to Premium Growth

The market premium (MNAV) of cryptocurrency treasury companies comes from investors' recognition of the growth potential of their acquired assets. DAT Company increases its holdings of crypto assets through financing (stock issuance or debt), creating a flywheel effect: more crypto assets → balance sheet expansion → stock price increase → more financing capability → further accumulation. This cycle amplifies the market's optimistic expectations for holding coins stocks, driving the MNAV premium. This flywheel effect is evidenced by the success of MicroStrategy, while ETH has some characteristics that make it more suitable as treasury assets compared to BTC.

2. What is the difference between ETH Treasury Company - Asset Yield

Unlike the limited asset of BTC's buying scarcity, ETH, as the largest DeFi network in the crypto world, will naturally generate returns through scaled holding.

(1) Staking Income: Ethereum transitioned to a PoS mechanism after the "Merge" in 2022, giving ETH the attribute of earning assets, while its ecosystem supports high-yield activities such as DeFi and RWA. These characteristics provide a stable cash flow source for DAT, forming the basis for "cash flow premium." As of August 2025, the total amount of staked Ethereum reached 36 million ETH, accounting for 30% of the total supply, with an average annualized yield of approximately 2.95% (actual yield around 1.5%-2.15%). A 1.5% risk-free yield is similar to the cash flow of traditional bonds.

(2) Liquidity Yield: Additional yield can be obtained by providing liquidity through DeFi protocols in the Ethereum ecosystem. In 2025, the TVL of Ethereum DeFi protocols is approximately $120 billion, and the annualized yield for liquidity mining typically ranges from 2-10%. Assuming that the token holding stock provides liquidity through DeFi protocols, a conservative estimate yields an annualized return of 3.5%. Combining staking yields (1.5%) and liquidity yields (3.5%), the token holding stock can achieve an approximate annualized cash flow yield of 5%. Using the Discounted Cash Flow (DCF) model, assuming a discount rate of 5%, with a cash flow premium of 1 times MNAV, the total MNAV multiple is 2 times.

(3) Other premiums: The EIP-1559 mechanism of Ethereum creates a potential deflationary characteristic for ETH by burning the base transaction fees. In 2025, Ethereum is expected to net issue 730,000 ETH (an annual inflation rate of about 0.6%), but this will be offset by the network's burn. If ETH achieves net deflation in the future, the price of ETH may only rise and amplify the cash flow returns of holding coins, indirectly enhancing the MNAV premium.

3. The buying volume of the treasury company has just begun

The buying costs of the ETH treasury companies for BMNR and SBET are relatively high, and they have sufficient liquidity. The overall buying volume in traditional finance is still in the startup phase. According to data summarized by Yu Jin, BitMine (BMNR) has reserved 1,523,373 ETH since July 9, with a cost of 5.68 billion dollars and an average price of 3,730 ETH, while SharpLink (SBET) has reserved 740,760 ETH since June 13, with a cost of 2.57 billion dollars and an average price of 3,478 ETH, additionally including 1,388 ETH rewards obtained through staking. As the price of Ethereum continues to rise, the holding costs for both companies will increase accordingly.

From the perspective of future financing capabilities:

BMNR: According to the Prospectus Supplement released on August 12, 2025, BMNR has increased the total amount of ATM to $24.5 billion, and it is estimated that approximately $4.45 billion has been raised through the ATM mechanism, holding about 1.52 million ETH, theoretically still having about $18–20 billion available. If the price of ETH is calculated at $4,700 per coin, BMNR could approximately increase its holdings by about 4.26 million ETH, bringing its potential total holding limit close to 5.78 million ETH, nearing the goal of holding 5% of the total amount.

SBET: SharpLink has rapidly accumulated approximately 740,760 ETH since launching its ETH treasury strategy in June 2025, through ATM financing (approximately $1.2 billion in total) and registered direct sales. Its ATM limit has been adjusted from the initial amount to a maximum of $6 billion. In addition, it is expected to raise about $600 million through targeted issuance. Assuming all financing is used to purchase ETH, based on ETH costs, the remaining ATM balance is estimated to be able to purchase 851,000 ETH.

Currently, the companies in the US stock market holding ETH have accumulated nearly 20 billion dollars worth of ETH, accounting for 3.39% of the total supply, with Bitmine still having 75% progress to reach its target of holding 5% of the total ETH.

Daily funds available from ATM:

MicroStrategy is a representative of the Bitcoin treasury strategy, with its trading volume varying significantly between bull and bear markets.

MicroStrategy implemented a Bitcoin treasury strategy in 2020. During the 2020-2021 bull market, the stock price rose from $13 to as high as $540, with daily trading volume increasing significantly, but it was greatly affected by market activity and BTC prices. Based on recent stock prices and average trading volume, the daily trading volume is estimated to be around $3.5 billion to $7 billion.

During the bear market in 2022, the price of Bitcoin plummeted from $69,000 to $16,000.

MicroStrategy's stock price has halved, trading volume has significantly shrunk, with the average daily trading volume dropping to between 200 million and 500 million dollars.

Compared to ETH DAT Company, similar situations may occur:

BitMine's current trading volume has reached daily $2 billion, peaking at $6 billion, approaching or exceeding MicroStrategy's peak in the last bull market, receiving high attention from the market. Meanwhile, SBET's daily trading volume is quite volatile, averaging 50 million shares, with a daily trading volume of about $1 billion. If the market enters a bear market, DAT's trading volume may shrink to $100 million to $500 million daily, similar to MicroStrategy's performance in 2022. Assuming 10%-20% of the daily trading volume can be converted to ATM, then under the current trading volume, $2 billion-$4 billion can be raised weekly for purchasing ETH, expected to last for 3 months according to ATM limits.

4. The long-term performance of ETFs remains strong

ETFs, as passive funds that achieve success through large-scale, low-cost strategies, have become the preferred choice for traditional large-scale capital allocation. From May 16 to August 15, the ETH ETF set a record for 14 consecutive weeks of net inflows, with a maximum single-week net inflow of $2.85 billion, and the net asset value accounting for 5.38% of the total supply. Among this, ETH valued at $19.2 billion (68%) was accumulated over the 14 weeks, with an estimated average purchase cost of around $3,600.

BlackRock's ETHA is the largest ETF by proportion, holding approximately 2.93% of the tokens, with a current market value of 17.2 billion dollars. Since April 2025, ETHA has been in a state of net inflow every week, with net inflow capital of about 8 billion dollars, and the largest single-week net inflow of 2.32 billion dollars.

Currently, the global gold ETF (aggregating ETFs/ETPs from various regions) is sized at 386 billion USD, Bitcoin at 179.5 billion USD, while Ethereum is only at 32.6 billion USD. If the Ethereum narrative can be sustained, a growth of 140 billion USD in buying volume is required to match the current Bitcoin ETF size.

5. Market sentiment shifts from BTC to ETH trading

From the perspective of contract positions and trading volume, BTC has clearly cooled down, with funds concentrating into ETH. At the beginning of May, the contract position ratio of BTC was 73%, but it is currently only 55%; the holding ratio of ETH has increased from 27% to 45%.

In terms of contract trading volume, the trading volume of BTC has decreased from 61% at the beginning of May to the current 31%; on the other hand, the trading volume of ETH has increased from 35% at the beginning of May to the current 68%, with a continuous increase in its share.

From the recent behavior of on-chain whales, there is currently a shift in risk appetite on-chain, with selling BTC and buying ETH. According to data from @ai_9684 xtpa, starting from August 20, an ancient BTC whale that had been dormant for 7 years sold part of its BTC and swapped for 71,108 ETH (worth about $304 million) at an average cost of about $4,284/ETH. Later, the total holding increased to 105,599 ETH (worth about $495 million). At the same time, it built long positions in ETH on Hyperliquid and staked 269,485 ETH (worth $1.25 billion) to the ETH beacon chain on August 25, directly surpassing the Ethereum Foundation's holdings (231,000 coins).

During Q2 2025, on-chain Ethereum whales (wallets holding 10,000 to 100,000 ETH) increased their holdings by 200,000 ETH ($515 million), while super whales (holding more than 100,000 ETH) saw their total ETH holdings rise from a historical low of 37.56 million ETH in October 2024 to over 41.06 million ETH, having increased their holdings by 9.31% since October 2024.

3. BTC chip structure remains relatively stable

Due to the wind shifting from BTC to ETH, BTC has recently performed relatively weakly. From the ETF perspective, there has been a significant net outflow; from the on-chain whale perspective, a large number of whales are swapping BTC for ETH. Based on the past experience of the four-year cycle in the crypto space, this bull market will reach a length comparable to previous bull markets in another 2-3 months. Therefore, there are concerns in the market: Is BTC about to enter a bear market? If BTC enters a bear market, how can ETH stand alone and achieve an independent upward trend?

We believe that the current fiscal cycle in the United States is longer than the cycles during the previous two cryptocurrency bull markets, while the chip structure of BTC remains relatively stable and is currently in a state of fluctuation.

The chart below is a schematic diagram of the BTC cost distribution. The gray bars represent the current price, while the blue boxes indicate the current main concentration areas of chips, which are 93 K-98 K, 103 K-108 K, and 116 K-118 K. The amount of chips accumulated in these three areas is enormous, and a large number of low-cost chips have been exchanged within this range, thereby forming a relatively strong support.

Currently, the chips in the range of 116 K-118 K are in a slight loss state, while the chips in the ranges of 93 K-98 K and 103 K-108 K are in a profit state. Although the BTC price performance is relatively weak at the moment, it has found support around 11 K, and there are still two larger support areas below, indicating an overall state of consolidation.

In addition, the current cost of short-term holders is approximately 108800. When BTC is running above this level, short-term holders as a whole remain in a profitable state and will not panic sell. Looking back at history, we can see that there were two instances in early 2024 where the price rebounded near the short-term holders' cost line, as well as a situation in February 2025 where the price fell below the cost line upon first touching it. If the price falls below this cost line, BTC will enter a mid-term adjustment, thereby affecting the overall trend of the cryptocurrency industry.

Currently, BTC is at a critical position. After touching the cost line yesterday, it rebounded. This week, we should closely monitor whether BTC can stabilize at this position.

Four, Continuous Improvement of the Macroeconomic Environment

1. Fundamental Valuation Logic Restructuring Under U.S. Regulations

In July 2025, the U.S. GENIUS stablecoin bill was officially legislated. Compared to BTC, stablecoins are pegged to the dollar at a 1:1 ratio, and their higher capital efficiency makes them more suitable as debt resolution tools. At the same time, stablecoins can drive the efficient inflow of global capital into the dollar system, supporting the purchase of U.S. Treasury bonds and injecting liquidity into on-chain financial assets, promoting the digital expansion of dollar hegemony. Currently, the total market value of stablecoins is $275 billion, while the market capitalization of BTC is $2.2 trillion. The global value of BTC mining machines is estimated at $15-20 billion, the market value of ETH is $550 billion, and the staking value is about $165 billion. In the future, whether it is to replace BTC's function in partial debt resolution, promote the coverage of asset on-chain value, or accommodate new payment systems, the scale of stablecoins will accelerate expansion in the long term, rapidly growing to a market size in the trillions of dollars.

As the main infrastructure for stablecoins and DeFi, ETH benefits from purchases driven by network security due to financial on-chain activities, and will also benefit from endogenous DeFi models: stablecoins inject foundational liquidity - the DeFi ecosystem uses stablecoins to create leverage and derivatives to purchase more ETH - a surge in trading activity drives Gas fees and promotes ETH burning. By using transaction fees (Gas fees) on the ETH network and proof of stake (PoS) as cash flow income, a rough valuation calculation can be made using a discounted cash flow (DCF) model. Under optimistic conditions (7% growth rate, 9% discount rate, leverage factor of 3), ETH's market value has the potential to exceed $3 trillion, surpassing the current market value of BTC.

2. The interest rate cut cycle is about to arrive

On August 22, Powell delivered a speech at the Jackson Hole meeting, stating that inflation remains elevated, but the downside risks to employment are increasing; against the backdrop of policies still being in a "restrictive" range, the committee will "proceed with caution" and will adjust its policy stance if necessary. Analysts generally believe that a rate cut in September is almost "a done deal" and represents a turning point towards a dovish shift. After the speech was released,

Cryptocurrency-related stocks and ETH-related assets surged in response, with ETH recovering all of its losses from earlier in the week and reaching a historical high of 4887.

In the past interest rate cut cycles, ETH has generally outperformed BTC. With the return of lawmakers to Congress after their September break, the push for crypto policy will accelerate quickly. The expectations for ETH's financial on-chain and DeFi boom have not yet materialized, providing a positive macro environment for ETH's market.

3. The Preferred Choice for Stablecoins and RWA Development

The U.S. government and financial institutions are pushing the pace of financial on-chain efforts sustainably. Currently, the scale of stablecoins reaches $275 billion, while the scale of RWA is $26.4 billion, with over 50% of stablecoins operating on the Ethereum network and RWA accounting for 53.4% on Ethereum. The total TVL of DeFi is 1611, with over 60% deployed on ETH. The BUIDL fund from ⻉莱德 has 95% deployed on Ethereum, and 80% of Securitize's tokenized shares are deployed on Ethereum.