Ten Core Reasons Why Ethereum is Moving Towards the Mainstream

The four major driving forces of regulatory easing, technological iteration, macroeconomic shifts, and deflationary mechanisms are paving an accelerated runway for Ethereum in the next 3 to 18 months.

1. Regulatory Benefits and Policy Support

The regulatory stance in the United States has undergone a significant shift, which is favorable for Ethereum. The new SEC Chairman Paul Atkins supports crypto innovation and has withdrawn the previous restrictive proposals related to DeFi. The GENIUS Act passed by the Senate provides a clear framework for the issuance of stablecoins, benefiting Ethereum's position as the primary settlement layer. The CLARITY Act clearly classifies ETH as a digital commodity, eliminating concerns about its security attributes. These regulatory green lights greatly lower the barriers to institutional participation.

2. Institutional Funds Flow In

More and more institutions are viewing ETH as a strategic asset. SharpLink Gaming acquired 176,000 ETH as reserve assets, becoming the largest public holder of ETH globally overnight. Bitmine Immersion also announced it has raised $250 million to purchase ETH. The first ETH futures ETF has been launched, and a spot ETF is on the horizon, expected to unleash billions of dollars in new demand.

3. Technical Indicators Warm Up

ETH has regained the weekly MA200, indicating a potential return of the bull market. The price structure has improved, showing higher lows and a breakout from a long-term descending channel. Momentum indicators show strengthening upward momentum, and several analysts have pointed out a potential bull flag pattern. The technical outlook supports a positive perspective for the next 3-18 months.

4. Protocol Upgrade Acceleration

The Pectra upgrade marks a new phase for Ethereum, encompassing multiple improvements ranging from smart wallets to scalability. The staking limit for individual validators has been increased, and fees have been recalibrated to enhance L2 throughput. The mainnet Gas Limit is being gradually increased, and TPS is expected to break into three digits. ZK integration is also actively being promoted, laying the foundation for comprehensive ETH ZKification.

5. Favorable Macroeconomic Environment

The Federal Reserve is expected to shift towards rate cuts, which may bring benchmark yields below ETH staking returns. By mid-2026, the federal funds rate could drop below 3.25%, while ETH staking yields are expected to rise due to increased network activity. This convergence of trends enhances the appeal of ETH as a high-yield asset.

6. Growth in Staking Demand

On-chain staking and ETF staking are working together to drive demand. Currently, about 28% of the total supply of ETH is staked, reaching a historical high. The staking landscape is becoming more diverse, with new platforms like Ether.Fi growing rapidly. The anticipated US staking ETF may bring more institutional demand, further reducing circulating supply.

7. Layer2 Adoption Surge

Large enterprises such as Sony and Robinhood are building platforms based on Ethereum L2. Coinbase's Base network processes over 6 million transactions daily. Binance's opBNB chain is also based on Optimism's L2. The widespread adoption drives more fees back to Ethereum, reinforcing its position as a settlement layer.

8. Mainstream and Political Dual Adoption

From the Trump family to Wall Street institutions, mainstream adoption is accelerating. Ethereum spot ETFs continue to record net inflows of funds, indicating a clear trend in institutional allocation. Globally, regions such as Europe, America, Asia, and Africa are actively adopting Ethereum technology in policy, finance, and technology sectors.

9. Ecological Governance Optimization

The Ethereum Foundation is undergoing a reorganization to optimize its organizational structure. The newly established Etherealize agency focuses on connecting with Wall Street. The technical approach is shifting towards the coordinated development of L1 and L2, and the mainnet performance is continuously improving. These changes lay the foundation for the next stage of development.

10. Deflationary Economic Model

The "ultrasound money" theory of Ethereum continues to be realized. Since the London upgrade, over 4.6 million ETH have been burned, reducing the circulating supply. The staking participation has slightly increased the issuance, but it is still far below the PoW era. Network usage remains strong, supporting the demand for ETH as fuel. Overall, it presents characteristics of low inflation and high yield.