Author: Nikka / WolfDAO (X: @10xWolfdao)
Current Market Situation and Key Turning Points
As of 2026, the total market capitalization of the cryptocurrency market has rebounded back above $3 trillion, while Bitcoin's dominance briefly dipped below 60%, sparking market discussions about a potential "altcoin season." Ethereum is now at a critical turning point. In the short term, it has broken through $3,200, marking a significant rebound from the lows seen at the end of 2025. Although it is still 34% away from its high of $4,700 in September 2025, multiple early signals suggest that ETH may be building up for a structural bull move.
1. Pledge queue reversal: Significant reduction in selling pressure
The most important catalyst in 2026 will come from a dramatic reversal in the staking queue. The "shift in momentum" marks the first "change of defense to offense" since July 2025, signaling that investor confidence has shifted from withdrawal to locking in.
Specifically, in mid-September 2025, when the price of ETH surged to around $4,700, a total of 2.66 million ETH were chosen to exit staking, creating selling pressure that lasted for several months. After three and a half months of digestion, the amount of ETH waiting to exit is now only about 80,000, meaning the source of selling pressure has essentially been eliminated. Meanwhile, the amount of ETH waiting to enter staking has sharply increased to 900,000–1,000,000, up about 120% from 410,000 at the end of December. This number is 15 times the size of the exit queue, causing the validator activation waiting time to extend to 17 days.
Currently, the total amount of staked ETH on Ethereum has reached 35.5 million, accounting for 28.91% of the circulating supply, with an annualized yield maintained between 3% and 3.5%. Historical data shows that when the inflow into the staking queue significantly exceeds the outflow, it often signals an upcoming price increase. This time, the supply being locked will significantly reduce the amount of liquid ETH in the market. Combined with whale activity, where large investors have continuously bought over $3.1 billion worth of ETH since July 2025, a strong foundation for a price rise is being established.
2. Institutional Participation: From Passive Holding to Active Involvement
If staking inversion is a signal from the supply side, then the aggressive entry of institutions represents the core driving force from the demand side. The world's largest Ethereum treasury company, BitMine Immersion Technologies, is rewriting the rules of the game. The company holds over 4.11 million ETH, accounting for 3.41% of the total supply. More importantly, it is transitioning from "passive holding" to "active yield generation."
In the past 8 days, BitMine has staked over 590,000 ETH, valued at more than $1.8 billion. On January 3rd alone, the company staked 82,560 ETH, worth approximately $259 million. The company plans to stake 5% of the total Ethereum supply through its proprietary validator network, MAVAN, in the first quarter, expecting annualized earnings of $374 million. This aggressive move has not only increased the staking queue but also caused the BMNR stock price to surge by 14%.
The broader institutional trends are equally remarkable. ETH spot ETFs saw cumulative inflows of over $9.6 billion in 2025, with a historical total inflow exceeding $125 billion. In early 2026, the net inflow on a single day once reached $1.74 billion. BlackRock's ETHA fund holds approximately 3 million ETH, valued at nearly $9 billion. Institutions like Coinbase and Grayscale predict that 2026 will mark the "Institutional Era," with more ETP products and on-chain vaults expected to double the total asset management size.
At the same time, large on-chain holders accumulated over 10 million ETH in 2025, setting a new historical record. These data collectively point to a fact: institutions no longer view ETH as a purely speculative asset, but rather as an infrastructure asset with yield potential.
3. Technological Upgrades: Evolving toward a Global Settlement Layer
2025 will be a major year for Ethereum technology. The Pectra and Fusaka upgrades will be implemented consecutively, laying a solid foundation for further breakthroughs in 2026. This is not just a performance optimization, but a strategic transformation—positioning Ethereum as a high-throughput, low-cost global settlement layer.
The Pectra upgrade will be completed in the first half of 2025, with a core breakthrough being EIP-7251, which raises the validator staking limit from 32 ETH to 2048 ETH. This greatly facilitates large-scale staking by institutions, while also increasing blob capacity, optimizing the validator mechanism, and reducing network congestion. This clears technical obstacles for aggressive staking initiatives by institutions such as BitMine.
More importantly, the Fusaka upgrade is coming. The implementation of this upgrade in December 2025 introduces PeerDAS (Peer-to-Peer Data Availability Sampling), which completely transforms Layer 2 data storage. Full nodes will no longer need to download all blob data, theoretically supporting an increase in blob capacity by over 8 times. Layer 2 fees are expected to decrease by 40-90% in 2026. EIP-7892 allows for future dynamic adjustments to blob parameters, enabling continuous scalability without hard forks—this is a systemic guarantee for long-term scalability.
The roadmap extending to 2026 is even more aggressive. The upcoming Glamsterdam upgrade is expected to introduce Verkle Trees, enshrined proposer-builder separation (ePBS), and block-level access lists, pushing Layer 1 TPS beyond 12,000 and enhancing MEV extraction mechanisms, significantly improving network efficiency and revenue capture capabilities. These technological advancements are not just theoretical—smart contract deployment volumes and invocation counts have both reached all-time highs, with on-chain activity reaching unprecedented levels.
4. RWA Monopoly: Monopolists of a Trillion-Dollar Opportunity
Ethereum's dominance in the field of real-world asset tokenization is becoming the strongest narrative driver by 2026. This is not just a self-congratulatory celebration within the crypto community, but rather a vote of confidence cast with real money by traditional financial institutions.
According to the latest statistics from RWA.xyz, the total value locked (TVL) in tokenized assets on the Ethereum blockchain has reached $12.5 billion, accounting for 65.5% of the market share, significantly surpassing BNB Chain's $2 billion, and less than $1 billion each for Solana and Arbitrum. Wall Street giants such as BlackRock and JPMorgan have already launched tokenized U.S. Treasury bonds, private loans, and fund products on the blockchain in large scale. The RWA market is expected to grow by over 212% by 2025, reaching a total size of more than $12.5 billion. Institutional surveys also show that 76% of asset management companies plan to invest in tokenized assets before 2026.
Institutional forecasts predict that the RWA (Real-World Assets) market will expand tenfold by 2026. As the most mature and secure settlement layer, Ethereum will directly capture the majority of the value from this trillion-dollar opportunity. The clarification of regulatory frameworks—particularly the expected passage of the CLARITY Act and stablecoin legislation in the first half of the year—will further accelerate this process.
The stablecoin sector is also overwhelmingly one-sided. Ethereum supports over $620 billion in circulation, accounting for more than 62% of the market share, and makes up 68% of DeFi TVL (Total Value Locked). Institutional-level use cases such as B2B payments and cross-border settlements are accelerating their migration onto the blockchain. According to an Artemis report, Ethereum-based stablecoin B2B payment volumes have steadily increased between 2024 and 2025. This is not speculative capital, but rather real demand from the real economy.
Summary
With the combined forces of the supply side, demand side, and technological advancements, Ethereum is highly likely to achieve a narrative shift from "follower" to "leader" by 2026. This will be a structural bull market driven by institutions, not a speculative frenzy fueled by retail investor sentiment.
For E-Watchmen who have endured hardship in recent years, 2026 might be the year they have been waiting for to see results. However, it remains a possibility rather than a certainty. Patience and rationality are still essential in this harsh market.