Crypto market ushers in a significant turning point: policy clarification and capital inflection point go hand in hand

This week, the crypto market welcomed two important catalysts: the legislative push of the United States' "Cryptocurrency Week" and the intensive outbreak of institutional layouts in Ethereum. This marks the formation of the "policy inflection point" and "capital inflection point" for the crypto industry in the second half of 2025. The deep logic of the industry is shifting from Bitcoin to Ethereum, stablecoins, and on-chain financial infrastructure. The clarification of U.S. policies and the institutional expansion of Ethereum indicate that the industry is entering a structurally positive phase, and the market's focus should gradually shift from "price games" to "capturing institutional dividends of rules and infrastructure."

U.S. "Crypto Week": Three Major Bills Release Positive Signals

In July 2025, the U.S. Congress systematically advanced comprehensive governance of encryption assets for the first time through a legislative agenda. Against the backdrop of dramatic changes in the global digital finance landscape and challenges to traditional regulatory models, these bills not only respond to market risks but also demonstrate that the United States is attempting to dominate in the next round of competition for financial infrastructure.

The "GENIUS Act" establishes a comprehensive regulatory framework for stablecoins, covering key elements such as custody requirements, audit disclosures, asset reserves, and settlement processes. This means that the stablecoin system, which has long been outside the purview of traditional financial regulation, will be incorporated into the U.S. sovereign legal structure for the first time. The bill's strong bipartisan support, evidenced by its high vote count in the Senate, provides institutional safeguards for the entire industry.

The "CLARITY Act" focuses on the classification of securities and commodities attributes of crypto assets, aiming to clarify the regulatory boundaries between the SEC and CFTC. This will end the long-standing "regulatory gray area" surrounding crypto assets and provide predictable legal basis for project parties, exchanges, and fund managers, unleashing the vitality of compliant innovation.

The "Anti-CBDC Surveillance State Act" prohibits the Federal Reserve from issuing central bank digital currency, preventing the government from monitoring individual financial activities in real-time through a digital dollar. This reflects Congress's emphasis on financial privacy and market freedom, and also suggests that the United States tends to support a crypto asset ecosystem that is market-driven, technology-neutral, and open and interconnected.

These bills collectively point to "regulation driving innovation", emphasizing "clear boundaries and reducing uncertainty". Once implemented, multiple direct impacts are expected: the barriers preventing institutional investors from entering on a large scale due to compliance concerns will gradually be lifted; the role of stablecoins as "on-chain dollars" will receive policy confirmation, greatly expanding their application scenarios; compliant exchanges and custodial banks will gain policy endorsement, reshaping the trust structure of the global crypto market.

From a deeper perspective, this series of legislations is a strategic response by the United States to a new round of reshaping the financial order. Stablecoins are becoming the vehicle for the digital expansion of the dollar's influence, as the U.S. attempts to inject institutional legitimacy through regulation. This is both a game of geopolitical financial power layout and a direct response to China's e-CNY and the EU's MiCA regulatory framework.

This deterministic rule will gradually transform into valuation certainty. Compliant assets, especially stablecoins, ETH, and their surrounding infrastructure, are expected to become the core beneficiaries of the next round of structural revaluation.

ETH Institutional Arms Race: ETF Entry, Staking Mechanism Transformation, and Asset Structure Upgrade on Three Fronts

Recently, with the rebound of ETH prices and the restoration of market confidence, a new round of "capital arms race" around Ethereum is unfolding. From Wall Street financial giants increasing their positions through ETFs to an increasing number of publicly listed companies incorporating ETH into their balance sheets, Ethereum is undergoing a profound restructuring of its market structure. This marks a new stage of recognition by traditional capital for ETH, as Ethereum evolves from a highly volatile, high-tech barrier decentralized asset to a mainstream financial asset with institutional-level allocation logic.

Since the launch of the Ethereum spot ETF in July 2024, it has accumulated a net inflow of $5.76 billion, accounting for nearly 4% of its market value. In the past two months, the inflow of funds has significantly accelerated, with multiple ETH ETF products recording monthly net inflows exceeding $1 billion, and traditional financial institutions have noticeably increased their holdings.

At the same time, the wave of listed companies "strategic reserves of Ethereum" has emerged. Companies such as SharpLink Gaming, Siebert Financial, Bit Digital, and BitMine have successively included ETH in their balance sheets, marking a new narrative turning point for ETH from "speculative asset" to "strategic reserve asset". It is worth noting that SharpLink currently holds over 280,000 ETH, exceeding the Ethereum Foundation's 242,500 ETH, making it the largest single institutional holder of ETH in the world.

Currently, institutional participation is mainly divided into two camps: the "Ethereum native camp" represented by SharpLink and the "Wall Street approach" represented by BitMine. This north-south pincer-like institutional accumulation model is causing the value anchor and price support system of ETH to shift towards a mainstream capital framework that is institutionalized, long-term, and structured.

This trend not only affects prices but may also reshape the governance, discourse, and ecological dominance of the Ethereum network. Although these companies currently hold ETH mainly for speculative hedging and capital operation considerations, their entry has created a magnifying effect in the capital market: ETH is being revalued, and the market narrative is shifting from the crowded lanes of DeFi and L2 to a new space of "reserve asset + ETF + governance rights."

It is worth noting that Ethereum has not yet seen a "spiritual leader" like Michael Saylor to reinforce cognition and promote accumulation. However, Vitalik Buterin and the Ethereum Foundation have recently been vocal, emphasizing technological resilience, security mechanisms, and the principles of decentralization, while also beginning to strengthen the "dual-track" structure of ecological governance mechanisms, intending to embrace institutional capital while avoiding governance power being controlled by a single force.

In summary, ETH is undergoing a comprehensive change in its capital structure: moving from a retail-driven open market to an institutional market structure driven by ETFs, publicly listed companies, and institutional nodes. This will reshape the construction path of the ETH price center as well as the governance structure and development rhythm of the Ethereum ecosystem. In this arms race, ETH is no longer just a representative of the tech stack, but is becoming a key asset in the wave of digital capitalism, serving as both a value-bearing tool and a focal point of power contention.

Market Strategy: BTC builds a high-level platform, ETH and medium to high-quality application chains welcome a catch-up logic.

As Bitcoin breaks through the $120,000 barrier and enters a consolidation phase, the structural rotation pattern of the crypto market becomes increasingly clear. Under the dominant logic of BTC, Ethereum and high-quality application chain assets are beginning to enter a valuation recovery period. The current market shows a typical "large-cap platform oscillation + mid-cap rotation rally" structure, with ETH and a group of L1/L2 protocols that have both narrative and technical support becoming the most valuable direction for speculation after Bitcoin.

1. BTC has entered the high-level platform construction phase: there is support downward, and upward momentum is weak. The number of active BTC addresses and trading volume have both declined, and the implied volatility of options continues to decrease, indicating that the market's expectations for a short-term breakout are diminishing. However, the enthusiasm for traditional institutional allocation has not significantly weakened, and BTC ETFs continue to see a small net inflow, suggesting that bottom support from funds remains. For institutions, Bitcoin has entered the "core allocation" phase, rather than continuing to chase short-term high profits.

2. The formation of ETH's rebound logic: from "lost leader" to "value pit" re-evaluation. The price of ETH has broken through the previous downward trend line, beginning to establish an upward channel, and has continuously recovered multiple key technical moving average levels. Combined with the funding situation and sentiment indicators, ETH has entered a new round of market sentiment switching cycle. During the sideways movement of BTC, the cost-effectiveness of ETH as a secondary mainstream asset is gradually increasing, along with multiple factors such as L2 ecosystem expansion, stable staking yields, and improved security, the market is re-evaluating its long-term value foundation.

3. The rise of mid-to-high quality application chains: Chains like Solana, TON, and Tanssi are ushering in structural opportunities. The market is accelerating its shift towards mid-to-high quality application chain assets that have "real narrative support." The activity within the Solana ecosystem has significantly rebounded, with multiple applications returning to users' attention. Tanssi, as an emerging infrastructure protocol within the Polkadot ecosystem, is gaining wide attention from institutions and developers. Additionally, middle layer protocols (such as EigenLayer and Celestia) and L2 Rollup solutions (such as Base and ZkSync) are gradually releasing value, becoming an important "valuation hub" between public chains and the application layer.

4. Market Strategy Outlook: Focus on "Value Rotation" and "Narrative Advancement"

• BTC allocation reserved, not the main focus: core position remains unchanged, but it is not advisable to continue chasing highs, pay attention to potential policy or macro disturbance risks.
• ETH as a core rotation configuration target: technical repair + strengthening of institutional narrative, suitable for mid-term configuration, if ETF funds accelerate inflow, there may be further upward space.
• High to medium quality public chains and modular protocols focus on: chains with technological innovation, strong ecological foundation, and capital support (such as SOL, TON, Tanssi, Base, Celestia) have the potential for continuous growth.
• Narrative shift forward, actively seeking new opportunities on the edge: Focus on early layout targets in DePIN, RWA, AI chains, and ZK directions. These narratives are currently in the funding pre-positioning stage and may become the core of the next phase rotation.

The current market has shifted from a single asset-driven phase to a structural rotation phase. The main upward wave of BTC has temporarily paused, and the rotation of ETH and high-quality new public chains will become the key driving force for the second half of the market. Strategically, one should abandon the habitual thinking of "chasing high leaders" and shift towards a mid-term trend layout of "valuation rebalancing + narrative diffusion."

Conclusion: Clear Regulation + ETH Main Rise, Market Enters Institutional Cycle

With the advancement of three key bills during the U.S. "Crypto Week", the industry is entering an unprecedented period of policy clarity. This clear regulatory environment not only eliminates years of unresolved compliance uncertainties but also lays a solid foundation for the institutional and formal development of the crypto market. As the arms race for strategic reserves of core assets like Ethereum accelerates, the market is gradually entering a new cycle dominated by institutional frameworks.

The synergistic effect of clear regulation and the revival of mainstream asset values is gradually helping the crypto market to break free from the previous "bull-bear cycle trap" and evolve towards a more stable and sustainable institutional cycle. A significant characteristic of the institutional cycle is that market fluctuations are more guided by fundamentals and policy expectations, and asset price fluctuations are no longer dominated by scattered emotions and regulatory news, but instead reflect a healthy interaction between capital and technology and steady growth.

The opening of a systemic cycle also signifies the diversification of market structure and the multidimensional upgrade of the ecosystem. The technological innovations and governance reforms in the Ethereum ecosystem will continuously promote the diversification of on-chain applications and enhance network utility, while the clarity of regulations will accelerate the compliant development of more quality projects, fostering the deep integration of on-chain finance and traditional finance. This development pattern will reshape the investment logic of crypto assets, leading the market into a new normal of "technology-driven + capital rationality + regulatory support."

Investors should seize the institutional dividends and growth opportunities of core assets, actively layout Ethereum and quality application chains, and embrace a healthier and more sustainable crypto new era.