Why BlackRock and Wall Street are suddenly betting big on Ethereum

Ethereum has spent years as the punchline of crypto jokes for never quite breaking past its old all-time high. But while the price has moved sideways, the network itself has been quietly getting stronger. Developers are still building, institutions are piling in, and major upgrades are on the way.

Let’s break down five key reasons Ethereum is still going strong – and why big players like BlackRock are betting that ETH’s best days may still be ahead.

1. Ethereum is still the number one home for builders

When it comes to developer activity, Ethereum is still in a league of its own. Data from Chainspect shows around 11,000 active developers working on Ethereum, putting it at the top of the rankings, just ahead of Solana.

On top of that, a report from Electric Capital revealed that Ethereum has passed a huge milestone: over 1 million lifetime developers have contributed to the ecosystem. Around 232,000 of them have been active in just the last 12 months. No other blockchain comes close to that level of long-term, sustained builder interest.

But it’s not just about how many people are building – it’s about what they’re building. Many of the most serious traditional finance (TradFi) players are choosing Ethereum as their base layer.

For example, Robinhood recently launched its own Ethereum layer-2 blockchain called Robinhood Chain. It’s focused on DeFi and tokenized stocks and, despite being live for less than a month, it has already seen hundreds of millions of dollars in daily trading volume and over a quarter of a billion dollars in total value locked (TVL).

Robinhood is far from alone. Ethereum has become the go-to chain for tokenized assets and on-chain financial products from major institutions.

2. TradFi tokenization is choosing Ethereum

Some of the world’s biggest financial institutions are already using Ethereum to tokenize traditional assets like money market funds and U.S. Treasuries.

Here are a few standout examples:

JP Morgan: The banking giant has multiple money market funds running on Ethereum. In December 2024, it launched the My Onchain Net Yield Fund (MONEY), which invests in U.S. Treasuries and repo agreements with a $1 million minimum for qualified investors. In May 2025, it followed up with the JP Morgan Onchain Liquidity Token Money Market Fund (JLTXX), a similar product designed to be accessible to more investors.

Franklin Templeton: Its OnChain U.S. Government Money Fund has grown into a major on-chain institutional liquidity fund backed by government securities, cash, and repos, with around $1.6 billion in assets under management at the time of recording.

BlackRock: The BlackRock USD Institutional Digital Liquidity Fund (BUIDL) launched in March 2024 and has become the largest tokenized Treasury fund in the world, with more than $2.5 billion in assets under management.

These are just a few examples, but they show a clear pattern: when big institutions want to tokenize real-world assets, they overwhelmingly choose Ethereum. The reasons are simple: security, predictability, liquidity, and mature infrastructure. Ethereum scores highly on all four.

As a result, Ethereum dominates the tokenized real-world asset (RWA) landscape with around 44% market share. That’s a powerful signal that serious money trusts Ethereum’s rails.

3. Ethereum still dominates on-chain capital

Beyond tokenization, Ethereum remains the largest hub for crypto capital across multiple key metrics.

Stablecoins: crypto’s on-chain cash

Stablecoins are the de facto cash of the crypto world. They power trading, lending, payments, collateral, and treasury management. Despite plenty of cheaper, faster alternatives, nearly half of the $300+ billion stablecoin market still lives on Ethereum.

This matters because stablecoins aren’t just speculative assets – they’re infrastructure. If users and institutions are willing to pay higher fees to keep their on-chain dollars on Ethereum, that’s a strong sign of trust in its security and liquidity.

DeFi total value locked (TVL)

Ethereum is also the clear leader in DeFi. At the time of recording, it holds over $41 billion in TVL – capital locked in smart contracts across lending protocols, DEXs, derivatives platforms, and more.

For comparison, the next largest smart contract chain by TVL is Solana with around $4.9 billion. That means Ethereum’s DeFi TVL is roughly eight times larger than its closest competitor.

Even with the rise of chains like Solana, Tron, and BNB Chain, Ethereum remains the primary destination for serious on-chain capital.

Layer-2 networks extend Ethereum’s reach

Another key piece of the puzzle is Ethereum’s expanding layer-2 (L2) ecosystem. Networks like Base, Arbitrum, Optimism, and Robinhood Chain inherit Ethereum’s security while massively increasing throughput and reducing fees.

Crucially, capital that moves onto these L2s usually stays within the Ethereum ecosystem. Users bridge funds from Ethereum mainnet to L2s, interact with apps, and often bridge back – but they don’t typically abandon Ethereum altogether.

ETH itself is also one of the most widely used collateral assets across DeFi, alongside Bitcoin. It’s used to borrow stablecoins, post margin for derivatives, participate in lending markets, and of course, to stake and secure the network.

All of this creates a powerful flywheel:

More capital → attracts more developers → who build more apps → which attract more users → which deepen liquidity → which draw in more institutions and capital.

Over time, this network effect makes it very hard for rival chains to catch up, even if they offer lower fees or faster block times.

4. Institutions finally have easy ways to buy ETH

For years, one of Ethereum’s biggest obstacles was access. Institutions couldn’t easily buy, hold, or earn yield on ETH within familiar, regulated structures. That’s changing fast.

Spot Ethereum ETFs and staking ETFs

Spot Ethereum ETFs have opened the door for traditional investors to gain direct price exposure to ETH through regular brokerage accounts.

In the first half of 2026, U.S. spot Ethereum ETFs saw eight straight weeks of net outflows as higher Treasury yields and a hawkish Federal Reserve pushed investors away from risk assets. But that trend reversed in July, with over $300 million in net inflows since then.

BlackRock’s Ether ETF has been the clear leader, sometimes accounting for more than 80% of daily ETF inflows into ETH. When the world’s largest asset manager is driving that much capital into Ethereum, other institutions tend to pay attention.

Ethereum also has a unique advantage over Bitcoin in the ETF space: staking. Since September 2025, U.S. investors have been able to buy Ethereum staking ETFs, which hold ETH, stake it on-chain, and distribute staking rewards back to shareholders.

Several staking ETFs are now live, including products from Rex, Osprey, Grayscale, and BlackRock. These funds let institutions earn native staking yield without having to run validators themselves, turning ETH into a yield-bearing asset inside a familiar wrapper.

Treasury companies holding ETH on their balance sheets

Another big driver of institutional demand is the rise of Ethereum treasury companies – public or private firms that hold large amounts of ETH as a core asset on their balance sheets.

The largest is Bitmine, which holds more than 5.5 million ETH and has a long-term goal of owning 5% of the total ETH supply. It’s already about 92% of the way there.

Bitmine is just one of 67 known Ethereum treasury companies. Together, they hold over 8.2 million ETH – more than 6.8% of the entire supply. With more companies expected to join as the market heats up, this number could grow significantly.

There are also organizations dedicated to helping Wall Street understand and adopt Ethereum:

Etherealize: Launched in January 2025, co-founded by billionaire investor Vabec Raman and Danny Ryan, a key former Ethereum Foundation member who helped coordinate the Merge. Their mission is to bridge the gap between Ethereum’s tech and institutional investors.

Ethereum Institutional: An independent nonprofit launched in July 2026 to help traditional finance entities learn how to use Ethereum’s infrastructure safely and effectively.

Ethereum even has a dedicated institutions page highlighting what the network can do, backed by real-world metrics and dollar figures. All of this makes it easier for large, conservative players to get comfortable with ETH.

If you’re interested in how Ethereum stacks up against Bitcoin in 2026 from an investor’s perspective, you may also want to read this deeper comparison of the real winner between Bitcoin and Ethereum in 2026.

5. ETH is a productive, yield-bearing asset

One of Ethereum’s biggest advantages is that ETH isn’t just a speculative token – it’s a productive asset.

Because Ethereum runs on proof of stake, anyone who stakes ETH to help secure the network earns a yield. At the time of recording, the base staking reward is around 2.65% annually. That might not sound huge to a small retail holder, but for companies with billions of dollars in ETH, it adds up fast.

Bitmine’s filings show just how powerful this can be. The company generated $45.7 million in revenue from staking rewards in a single quarter – about 98% of its total revenue. Its chairman, Tom Lee, has projected annualized staking rewards of around $284 million once all of Bitmine’s ETH is staked (though of course, this depends heavily on ETH’s price and network conditions).

Compare that to Bitcoin treasury companies. BTC can’t be staked natively, so Bitcoin treasuries only make money if the price goes up or if they take on extra risk through lending, derivatives, or other strategies. If Bitcoin’s price stagnates or risk appetite falls, they may be forced to sell BTC to cover costs.

Ethereum treasuries, on the other hand, can earn ongoing staking income even during sideways markets. That makes ETH behave more like a bond or a dividend-paying stock in the eyes of institutions – a huge psychological and financial advantage.

This yield component is also a key reason why many investors are becoming more bullish on Ethereum, especially as large asset managers like BlackRock ramp up their ETH exposure. For more context on how BlackRock’s moves have influenced crypto sentiment, you can check out this breakdown of BlackRock’s latest Bitcoin comments and the renewed bullishness around BTC.

6. Major upgrades are coming: Glamsterdam and beyond

On top of all the capital and institutional interest, Ethereum’s core protocol is still evolving. Several major upgrades are on the roadmap, aimed at scaling the network and improving decentralization without sacrificing security.

Glamsterdam: scaling Ethereum’s base layer

The next big upgrade is called Glamsterdam, scheduled for the second half of 2026. Many in the community see it as Ethereum’s most important upgrade since the Merge.

Glamsterdam will bundle multiple Ethereum Improvement Proposals (EIPs) into one hard fork. Two of the most important are:

EIP-7732: Enshrined Proposer-Builder Separation (EPBS)

Today, many validators rely on external services called relays to connect with specialized block builders who optimize blocks and capture MEV (maximal extractable value). This setup can be opaque and introduces centralization risks.

EPBS brings the proposer-builder separation directly into Ethereum’s protocol. Validators and builders will have clearly defined roles, and Ethereum itself will handle the handoff and payments. This reduces reliance on third-party relays, making block production more transparent, decentralized, and resistant to censorship.

EIP-7928: Block-level access lists (BALLs)

Right now, Ethereum processes transactions one by one because it doesn’t know in advance which pieces of data each transaction will touch. That limits throughput.

Block-level access lists change this by mapping out, ahead of time, which accounts and data a block will need. This allows multiple transactions to be executed in parallel, like turning a one-lane road into a multi-lane highway.

The result: more data per block, more efficient execution, and lower gas fees on Ethereum layer 1. For users, that means cheaper swaps, transfers, and dapp interactions.

Hegata and the push for stronger censorship resistance

After Glamsterdam, the next planned upgrade is called Hegata, also expected in the second half of 2026. Its final contents are still being discussed, but one EIP is already slated for inclusion:

EIP-7805: FOSSIL (Fork Choice Enforced Inclusion Lists)

FOSSIL aims to strengthen Ethereum’s censorship resistance. It ensures that valid transactions can’t simply be ignored indefinitely by block builders. In practice, it gives the network a built-in safety net so no single group can quietly decide which transactions get included on-chain.

Other EIPs being considered for Hegata focus on:

Account abstraction: This would separate transaction verification from execution, enabling features like flexible signing methods, batched operations, and paying gas fees in stablecoins instead of ETH.

Verkle trees: A new data structure that replaces the current Merkle Patricia trees. Verkle trees allow validators to prove large amounts of data using much smaller cryptographic proofs. That means nodes can store less data, blocks become faster to verify, and running a validator becomes less hardware-intensive – all of which improve scalability and decentralization.

The big picture: these upgrades aim to make Ethereum cheaper, faster, and more censorship-resistant at the base layer, while keeping the security guarantees that make institutions comfortable parking billions of dollars on the network.

7. What does all this mean for ETH’s price?

So with all this growth under the hood, what about ETH’s price?

Recently, ETH has climbed around 23% over a three-week stretch. But the more interesting story is how it’s performing relative to Bitcoin.

For most of 2026, ETH has been in a tough downtrend against BTC. The ETH/BTC ratio fell to about 0.025 in early June, more than 40% below its August 2025 peak. That underperformance is a big reason many traders wrote ETH off.

Since early June, though, ETH has been slowly climbing against BTC for over 40 days. The ETH/BTC pair is now flirting with a breakout above its 200-day moving average – a level that has historically preceded strong periods of outperformance for Ethereum.

That said, some indicators are flashing caution:

• The RSI is creeping toward overbought territory.
• The MACD suggests a potential move to the downside.
• Trading volume isn’t particularly strong, which raises questions about how sustainable the recent rally is.

Zooming out further, the 200-week moving average for ETH/BTC sits around 0.04. ETH would need to rally roughly 36% against BTC to break above that level – not impossible, but a big move at this stage of the cycle.

Whether Glamsterdam becomes the catalyst that pushes ETH through that resistance remains to be seen, but the setup is interesting.

8. Analyst targets and the road ahead

Traditional banks have started publishing their own ETH price targets for year-end:

• Standard Chartered sees ETH potentially reaching around $4,000, driven by Ethereum’s dominance in stablecoins and tokenized RWAs.
• Citi is more conservative, with a target of about $2,240, citing slow U.S. crypto legislation and muted expectations for ETF inflows.

Nobody has a crystal ball, but given ETH is trading below $2,000 at the time of recording, both of those targets imply upside from here – with Standard Chartered’s scenario pointing to a much stronger rally.

What’s clear is that, beneath the price chart, Ethereum has a lot going for it: dominant developer activity, deep on-chain capital, growing institutional adoption, a productive staking-based asset, and major upgrades on the horizon.

Whether that all translates into a new all-time high is something the market will decide. But if you look beyond the memes and the short-term price swings, it’s not hard to see why BlackRock and other giants are quietly betting big on ETH.