Written by: Alex O'Donnell, CoinMarketCap
Compiled by: Saoirse, Foresight News
The Ethereum network is gaining Wall Street's approval, but investors still aren't fully bullish on ETH.
In recent months, institutional adoption of Ethereum has accelerated significantly. Since May, multiple financial institutions, including JPMorgan, Robinhood, and Morgan Stanley, have launched a variety of Ethereum-related products and services. In July, several former members of the Ethereum Foundation established the nonprofit independent organization Ethereum Institutional, with the goal of accelerating institutional adoption of Ethereum.
Meanwhile, Ethereum co-founder Vitalik Buterin has released a major network upgrade roadmap titled "Lean Ethereum," designed to enhance Ethereum's privacy capabilities and resistance to quantum attacks.
However, the market has not responded positively. At the time of writing, ETH is trading slightly above $1,900, representing a decline of more than 60% from its all-time high of approximately $4,950 in August 2025. Analysts generally believe it will be difficult for ETH to return to its previous highs in the short term. On July 1, Citi lowered its 12-month price target for Ethereum from $3,175 to $2,240, citing weakening investor demand and continued net outflows from Ethereum ETFs.
Galaxy's institutional research team stated that the reason for the disconnect between price and fundamentals is clear: an increasing number of investors no longer understand the logic behind ETH's value growth.
Wall Street's strategic footprint continues to expand
Today, institutions are no longer limiting their application of blockchain to pilot projects, and Ethereum is one of the biggest beneficiaries of this trend.
In May, JPMorgan Asset Management launched its second tokenized money market fund, JLTXX, on the Ethereum mainnet. In July, online brokerage Robinhood launched Robinhood Chain, an Ethereum Layer 2 network designed for financial services and tokenized assets.
Morgan Stanley is also helping to bring ETH further into mainstream brokerage accounts. Eligible E*TRADE users can now trade and hold Ethereum, Bitcoin, and SOL.
Major institutions are increasingly investing in Ethereum because of its mature developer ecosystem and its large, decentralized network of validation nodes; institutional adoption is likely to accelerate further.
On July 1, ConsenSys CEO Joe Lubin stated: The vast majority of stablecoin issuance, tokenized assets, decentralized finance, and various on-chain financial infrastructure will prioritize Ethereum.
Plan a major upgrade
In addition, Ethereum is about to undergo a comprehensive technological upgrade, which will further enhance its appeal to various institutions.
In July, Buterin publicly unveiled the "Lean Ethereum" development plan, with an entire restructuring cycle estimated at three to four years. He stated that the scale of this upgrade is comparable to Ethereum’s full-network transition to a proof-of-stake consensus mechanism in 2022.
This upgrade aims to reduce Ethereum usage costs, enhance network security, and improve user privacy protection—privacy safeguards are highly valued by institutional traders. If successfully implemented, Ethereum could become one of the first blockchains with reliable quantum attack resistance.
In July, Ethereum Foundation researcher Justin Drake said that strong security properties will be a natural advantage attracting global institutions to migrate to Ethereum.
Economic fundamentals are uncertain
Good news keeps coming, but ETH's price remains low.
One of the root causes lies in Ethereum’s scaling solutions. Ethereum heavily relies on layer-2 blockchains to enable lower-cost, higher-efficiency transaction processing.
Theoretically, higher on-chain activity generates more transaction fees and increases demand for ETH. However, data from L2Beat shows that since the beginning of 2024, the vast majority of transactions in the Ethereum ecosystem have been handled by layer-2 networks, which only periodically settle on the Ethereum mainnet.
Scaling solutions have significantly reduced transaction costs and helped Ethereum handle more traffic, but they have also decoupled on-chain activity from ETH demand: a large volume of transactions has shifted off the mainnet, reducing the fees earned by Ethereum’s main chain.
Researchers at 21Shares stated in January: Such a change benefits ordinary users, but presents mixed implications for ETH holders. Unless overall on-chain transaction volume surges sufficiently to offset the decline in fees, lower fees will reduce the amount of ETH burned.
Market predictions are sharply divided
Currently, Ethereum is likely to grow into a core financial infrastructure, but how much benefit ETH holders will ultimately reap remains uncertain. Price expectations from various industry participants vary widely.
Citibank predicts that ETH will be around $2,000 in 12 months; Standard Chartered is more optimistic, expecting ETH to reach $4,000 by the end of 2026 and $40,000 by 2030.
BitMine Chairman Tom Lee is more aggressive, believing that ETH's long-term price could reach as high as $250,000, corresponding to a total market capitalization of approximately $30 trillion.
Overall, the probability of Ethereum becoming a mainstream core financial infrastructure is increasing, but it remains uncertain whether ordinary token holders can fully benefit from the industry's growth.