Ten Favourable Information Factors of Ethereum

1. The regulatory environment has clearly improved.

The attitude of US regulators towards cryptocurrencies has undergone a significant shift. The new SEC Chairman Paul Atkins supports crypto innovation and has withdrawn previous proposals aimed at DeFi and self-custody wallets. He emphasized that developers should not be punished for writing decentralized code, which stands in stark contrast to the previous hostile stance.

At the same time, the U.S. Congress is advancing several cryptocurrency legislations, such as the GENIUS Act and the CLARITY Act. These bills aim to establish a clear framework for stablecoin issuance and the regulation of crypto assets, which is expected to provide more legal certainty for the Ethereum ecosystem.

2. Institutional investors are accelerating their entry.

More and more institutions are viewing Ethereum as a strategic asset. SharpLink Gaming acquired $463 million worth of ETH, becoming the world's largest public ETH holder. Bitmine Immersion also announced raising $250 million to purchase ETH.

The first batch of Ethereum futures ETFs has been launched, and spot ETFs are also expected to be approved. Large asset management companies like BlackRock are actively laying out plans in the Ethereum market. These developments indicate that institutional investors' interest in Ethereum is increasing day by day.

3. Technical indicators regain strength

The price of Ethereum re-established itself above the weekly MA200 in May 2025, which is a classic signal of the return of a bull market. The price structure has also improved, showing higher lows and breaking through a long-term descending channel.

Momentum indicators like MACD show that upward momentum is strengthening. Multiple analysts have pointed out the potential bullish flag pattern appearing on the ETH chart, which, if confirmed, could indicate a target price above 3000.

4. Technical upgrades continue to advance

The technology roadmap of Ethereum is progressing steadily. The Pectra upgrade, scheduled for launch in May 2025, includes 11 significant improvements, covering various aspects from smart wallets to scalability. Among the most notable changes are raising the staking limit for a single validator from 32 ETH to 2048 ETH, and recalibrating fees to enhance Layer-2 performance.

At the same time, Ethereum is actively promoting the integration of zero-knowledge proof technology to lay the foundation for future scalability. These upgrades keep Ethereum technically ahead.

5. The macroeconomic environment is turning favourable

Market expectations are that the Federal Reserve will shift to interest rate cuts in the coming months, which may cause the benchmark yield to fall below ETH staking returns. CME Fed Watch predicts that by mid-2026, the federal funds rate will drop to 3.25% or lower.

At the same time, the Ethereum staking yield is expected to rise due to increased network activity. This trend could enhance the appeal of ETH as a high-yield and highly liquid asset. More accommodative monetary policies also tend to be favourable for crypto assets.

6. The staking ecosystem is thriving.

The participation rate in Ethereum staking continues to rise. As of the first quarter of 2025, approximately 28% of the total ETH supply is staked. The staking landscape is also becoming more diversified, with new platforms like Ether.Fi showing strong growth.

The U.S. is expected to approve a staking ETF, which could bring billions of dollars in new institutional demand. Staking not only offers stable returns, but Ether itself also has the potential for appreciation, making it highly attractive to investors.

7. The Layer-2 ecosystem is thriving.

Ethereum's Layer-2 scaling strategy has achieved significant results. Large enterprises such as Sony, Robinhood, and Coinbase have launched L2 networks based on Ethereum. The trading volume on these platforms has surged, demonstrating Ethereum's potential for large-scale expansion.

The prosperity of the L2 ecosystem not only enhances the scalability of Ethereum but also increases the demand for ETH as a fundamental asset.

8. Accelerating Mainstream Adoption

More and more mainstream institutions and governments are adopting Ethereum technology. PayPal has launched an Ethereum-based stablecoin, and Visa is using Ethereum to settle USDC payments. Several large banks in Europe are using Ethereum as a platform for issuing digital bonds, and Hong Kong supports Ethereum-based ETFs.

This widespread adoption has not only increased the practical use of Ethereum but also enhanced its status as a global financial infrastructure.

9. Continuous Innovation in the Ecosystem

Vitalik Buterin continues to drive technological innovation in Ethereum, focusing on cutting-edge areas such as ZK proofs and RISC-V integration. The Ethereum Foundation has undergone organizational restructuring to optimize decision-making and execution efficiency. The newly established Etherealize organization is dedicated to promoting the application of Ethereum in the institutional market.

These measures indicate that the Ethereum ecosystem is developing in a more mature and influential direction.

10. The deflationary token economic model continues to play a role.

The "ultrasonic currency" theory of Ethereum is being realized. Since the London upgrade, over 4.6 million ETH have been burned. Although staking has increased a small amount of new issuance, the overall supply growth rate is still far below that of the PoW era.

During periods of high network activity, ETH supply even shows a net deflation. As L2 adoption drives more transactions to settle on L1, this deflationary trend may be further strengthened. This supply-demand dynamic provides strong support for ETH prices.