Why is Goldman Sachs' judgment on Ethereum wrong?

Written by: Brendan on Blockchain

Compilation: Vernacular Blockchain

A few years ago, Ethereum was still the "younger brother" of Bitcoin, known for decentralized finance (DeFi), pixelated NFTs, and highly creative smart contract experiments, far from the choice of "serious" investors. However, by 2025, Ethereum has become the focus of Wall Street.

Goldman Sachs perfectly exemplified the conventional mindset of traditional institutions in 2021, when they denigrated Ethereum as "too volatile and speculative," labeling it as "a solution looking for a problem." Their research team believed that smart contract technology was overhyped, with limited real-world applications, and that institutional clients had "no legitimate use cases" for programmable currencies. They were not alone; JPMorgan referred to it as a "pet rock," and traditional asset management firms shunned it even more.

However, this view is as outdated as when the internet was once called a "flash in the pan." Today, Goldman Sachs is quietly building trading infrastructure based on Ethereum, and JPMorgan is processing billions of dollars in transactions through its Ethereum-driven Onyx platform, while those asset management companies that once shunned it are now rapidly launching Ethereum-related products.

The real turning point occurs in 2024 when the U.S. Securities and Exchange Commission finally approves the Ethereum spot ETF. This may not sound like an exciting dinner table topic, but its significance is immense. Unlike Bitcoin, which is simply classified as "digital gold", Ethereum poses a challenge for regulators: how to regulate a programmable blockchain that supports everything from decentralized trading platforms to digital art markets? They ultimately resolved this issue and gave the green light, which is indicative of the direction of the industry's development.

The gate for ETFs is open.

For many years, there has been skepticism about the regulatory clarity surrounding Ethereum, particularly regarding the SEC's ambiguous stance on whether Ethereum is classified as a security. However, the approval of ETFs marks an important signal: Ethereum has matured into an investable asset for pensions, asset management companies, and even conservative family offices.

BlackRock (BlackRock) pioneered the launch of the iShares Ethereum Trust, and frankly, watching the launch was like witnessing the "fear of missing out" for institutional investors (FOMO) playing out in real time. Fidelity (Fidelity) followed, Grayscale (Grayscale) converted its existing products into ETFs, and suddenly, every major asset manager launched Ethereum products. But what's even more striking is that these products aren't limited to regular ETFs that track the price of ETH, and some also incorporate staking rewards, meaning that institutional investors can earn by holding their holdings just like DeFi participants.

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The visual presentation of the organization's adoption of Ethereum price fluctuations before and after.

Enterprises fully embrace

What is truly captivating is how companies are integrating Ethereum into their actual business operations. This is not a speculative asset reserve like Bitcoin, but rather companies building digital infrastructure on Ethereum because it can solve real-world problems.

The real value of Ethereum to institutions lies in its infrastructure as a programmable blockchain, capable of handling tokenized currencies, digital contracts, and complex financial workflows.

Institutions are quickly joining this wave:

Franklin Templeton (, a company managing $1.5 trillion in assets, has tokenized one of its mutual funds on Ethereum, allowing investors to hold digital shares on the blockchain and enjoy the benefits of transparency and 24/7 settlement.

JPMorgan, through its blockchain division Onyx, is testing tokenized deposits and asset swaps using Ethereum-compatible networks ) such as Polygon and their enterprise version of Ethereum, Quorum(.

Amazon AWS and Google Cloud now offer Ethereum node services, allowing businesses to easily connect to the network without building their own infrastructure.

Microsoft collaborates with ConsenSys to explore enterprise use cases ranging from supply chain tracking to compliance smart contracts.

These are no longer just the realm of native crypto players. Traditional financial giants are awakening to the fast, secure, and automated intermediary-free financial services offered by Ethereum.

The conversations among CFOs of Fortune 500 companies have completely changed. They are no longer questioning whether blockchain makes sense; instead, they are asking how to quickly apply automation of smart contracts to vendor payments, supply chain financing, and internal processes. The efficiency gains are evident.

The gaming and entertainment industry is 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 solved decades-old problems in these industries almost overnight.

Why is Ethereum so attractive to institutions?

Ethereum allows assets ), whether it's dollars, stocks, real estate, or carbon credits (, to be digitized, tokenized, and programmed. Combined with major stablecoins ) that run on Ethereum, such as USDC or USDT(, you suddenly have the foundation to build a new financial operating system.

Need cross-border instant settlement?

Need programmable payments based on contract milestones?

Need transparency without losing control?

Ethereum can do it all, and even more.

In addition to Layer 2 networks such as Arbitrum and Optimism, these solutions expand Ethereum's capacity, reduce fees, and significantly increase speed. Many institutions choose to build on Layer 2 networks to improve efficiency while still leveraging Ethereum's liquidity and security.

The adoption of all these institutions is inseparable from the infrastructure layer that most people overlook. Companies like BTCS Inc. are increasingly supporting traditional financial institutions in the necessary infrastructure for products like Ethereum and ETH ETFs. BTCS focuses on operating secure enterprise-level Ethereum validation nodes, maintaining network integrity and allowing institutions to participate in staking without dealing with technical complexities. Although they are neither custodians nor ETF issuers, their validation node operations support the functionality and credibility of Ethereum, enhancing the network resilience and transparency required by institutional investors.

Looking to the future

What is the future trend? I think the direction is very clear. Ethereum is becoming the infrastructure layer for programmable finance. We are no longer just discussing cryptocurrency trading, but also automated lending, programmable insurance, tokenized real estate, and around-the-clock supply chain financing.

The integration with Central Bank Digital Currency )CBDC( represents another huge opportunity. As countries formulate 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 that the entire industry has been expecting. As major financial institutions build products around Ethereum, regulators are strongly motivated to establish a workable framework rather than impose blanket restrictions.

We are witnessing a technology that started as an experimental platform gradually becoming a key financial infrastructure. The approval of ETFs is significant, but it is just the opening act. The real story lies in how Ethereum fundamentally changes the way financial services operate, the way businesses manage their operations, and the way value flows in the global economy.

To be honest, I think we are still in the early stages of this transformation. The current adoption by institutions is just the beginning of the large-scale integration of programmable money with traditional finance.