Author: Brendan on Blockchain
Translated by: Plain Blockchain
A few years ago, Ethereum was Bitcoin's "little brother", known for decentralized finance (DeFi), pixelated Non-Fungible Tokens, and creative smart contract experiments, far from being a choice for "serious" investors. However, by 2025, Ethereum has become the focus of Wall Street.
Goldman Sachs perfectly embodied the traditional institutional mindset in 2021, when they dismissed Ethereum as "overly volatile and speculative", calling it a "solution looking for a problem". Their research team believed that smart contract technology was overhyped, with limited real-world applications, and institutional clients had "no legitimate use case" for programmable currency. They were not alone, with JPMorgan calling it a "pet rock", and traditional asset management companies avoiding it altogether.
However, this view is as outdated as calling the internet a "flash in the pan". Now, Goldman Sachs is quietly building Ethereum-based trading infrastructure, JPMorgan processes billions of dollars in transactions through its Ethereum-driven Onyx platform, and asset management companies that once kept their distance are now launching Ethereum-related products at the fastest pace.
The real turning point came in 2024 when the U.S. Securities and Exchange Commission (SEC) finally approved the Ethereum spot ETF. This might not sound like an exciting dinner table topic, but its significance is immense. Unlike Bitcoin, which is simply categorized as "digital gold", Ethereum was a challenge for regulators: how to regulate a programmable blockchain that supports everything from decentralized trading platforms to digital art markets? They ultimately solved this problem and gave the green light, which is enough to indicate the direction of the industry.
The ETF Floodgates Open
For years, there have been doubts about Ethereum's regulatory clarity, especially the SEC's ambiguous stance on whether Ethereum is a security. However, the ETF approval signals an important message: Ethereum has matured into an investable asset for pension funds, asset management companies, and even conservative family offices.
BlackRock was the first to launch the iShares Ethereum Trust, and frankly, watching the launch was like witnessing institutional investors' "fear of missing out" (FOMO) in real-time. Fidelity followed suit, Grayscale converted its existing products to ETFs, and suddenly, every major asset management company launched Ethereum products. More notably, these products were not just ordinary ETFs tracking ETH price; some incorporated staking rewards, meaning institutional investors could earn returns through holding, just like DeFi participants.
Visualization of Ethereum price fluctuations before and after institutional adoption
Enterprise Full Embrace
What's truly fascinating is how enterprises are integrating Ethereum into actual business operations. This is not a speculative asset reserve like Bitcoin, but enterprises building digital infrastructure on Ethereum because it solves real problems.
Ethereum's true value for institutions lies in its infrastructure as a programmable blockchain, capable of handling tokenized currencies, digital contracts, and complex financial workflows.
Institutions are rapidly joining this wave:
- Franklin Templeton, a company managing $1.5 trillion in assets, tokenized one of its mutual funds on Ethereum, where investors now hold digital shares on the blockchain, enjoying transparency and all-day settlement benefits.
- JPMorgan is testing tokenized deposits and asset swaps through its blockchain division Onyx, using Ethereum-compatible networks like Polygon and their enterprise Ethereum Quorum.
- Amazon AWS and Google Cloud now offer Ethereum node services, allowing enterprises to easily access the network without building infrastructure.
- Microsoft is collaborating with ConsenSys to explore enterprise use cases from supply chain tracking to compliance smart contracts.
These are no longer just domains of crypto-native players. Traditional financial giants are awakening, realizing the fast, secure, and automated intermediary-free financial services Ethereum provides.
Conversations among Fortune 500 CFOs have completely changed. They no longer question whether blockchain makes sense, but ask how to quickly apply smart contract automation to vendor payments, supply chain financing, and internal processes. The efficiency improvements are obvious.
The gaming and entertainment industries are particularly aggressive. Mainstream game studios are tokenizing in-game assets, music platforms are automating royalty distribution, and streaming services are experimenting with decentralized content monetization. Ethereum's transparency and programmability have almost overnight solved decades-old problems in these industries.
Why is Ethereum So Attractive to Institutions?
Ethereum allows assets (whether dollars, stocks, real estate, or carbon credits) to be digitized, tokenized, and programmable. Combined with stablecoins (like USDC or USDT) primarily running on Ethereum, you suddenly have the cornerstone for building an entirely new financial operating system.
- Need instant cross-border settlement?
- Need programmable payments based on contract milestones?
- Need transparency without losing control?
Ethereum can do this and more.
Add Layer 2 networks like Arbitrum and Optimism, which expand Ethereum's capacity, reduce fees, and significantly improve speed. Many institutions choose to build on Layer 2 networks to enhance efficiency while still leveraging Ethereum's liquidity and security.
This institutional adoption is inseparable from the infrastructure layer most people overlook. Companies like BTCS Inc are increasingly supporting the necessary infrastructure for traditional financial institutions to participate in Ethereum and ETH ETF products. BTCS focuses on operating secure enterprise-grade Ethereum validation nodes, maintaining network integrity and allowing institutions to participate in staking without dealing with technical complexities. While they are not custodians or ETF issuers, their validation node operations provide support for Ethereum's functionality and credibility, enhancing the network resilience and transparency that institutional investors require.
Looking Forward
What are the future trends? I believe the direction is very clear. Ethereum is becoming the infrastructure layer for programmable finance. We're no longer just discussing cryptocurrency trading, but automated lending, programmable insurance, tokenized real estate, and 24/7 operating supply chain financing.
Integration with Central Bank Digital Currencies (CBDCs) is another massive opportunity. As countries develop digital currency strategies, many are considering Ethereum-compatible solutions to enable seamless interaction between government-issued digital currencies and the broader DeFi ecosystem.
More importantly, this institutional embrace is driving the long-awaited regulatory clarity for the entire industry. When major financial institutions build products around Ethereum, regulators have a strong motivation to establish workable frameworks rather than comprehensive restrictions.
We are witnessing a technology that started as an experimental platform gradually becoming critical financial infrastructure. The ETF approval is significant, but it's just the prologue. The real story is how Ethereum will fundamentally change the way financial services operate, how businesses manage operations, and how value flows in the global economy.
Honestly, I believe we are still in the early stages of this transformation. The current institutional adoption is just the beginning of large-scale integration between programmable currency and traditional finance.
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