In July 2025, the ETH price on the Ethereum network surged nearly 50%. Investors focused their attention on stablecoins, asset tokenization, and institutional adoption—areas that represent Ethereum's core advantages as the oldest smart contract platform.

The passage of the GENIUS Act marks a milestone for stablecoins and the entire crypto asset category. Although market structure-related legislation may take time to pass in Congress, U.S. regulators can continue to support the digital asset industry through other policy adjustments, such as approving staking functions in crypto investment products.

In the short term, crypto asset valuations may experience consolidation, but we remain very optimistic about the asset class's prospects in the coming months. Crypto assets provide investors with an opportunity to engage with blockchain innovation while potentially offering some immunity to certain risks of traditional assets, such as the ongoing weakness of the U.S. dollar. Therefore, Bitcoin, ETH, and many other digital assets are expected to continue attracting investor interest.

On July 18, President Trump signed the GENIUS Act, providing a comprehensive regulatory framework for U.S. stablecoins. This marks the "end of the beginning" for the crypto asset category: public blockchain technology is moving from the experimental stage to the core of the regulated financial system. The debate about whether blockchain technology can bring real benefits to mainstream users has ended, and regulators are now focusing on ensuring that the industry grows with appropriate consumer protection and financial stability mechanisms.

In July, the crypto market was elated by the passage of the GENIUS Act and supported by favorable macroeconomic conditions. Stock market indices rose in most parts of the world, with fixed-income market returns led by high-risk sectors such as U.S. high-yield corporate bonds and emerging market bonds (see Chart 1). As market volatility decreased, related investment strategies performed quite well.

The FTSE/Grayscale Crypto Asset Market Index (a market-cap-weighted investable digital asset index) rose 15%, while Bitcoin's price grew 8%. Ethereum's ETH was the star of the month, with its price skyrocketing 49%, accumulating a total increase of over 150% since its low point in early April.

Don't Call This a "Comeback"

Ethereum is the largest smart contract platform by market cap and the infrastructure of blockchain finance. However, until recently, ETH's price performance was far behind Bitcoin and even lagged behind other smart contract platforms like Solana. This led some to question Ethereum's development strategy and its competitive position in the industry (see Chart 2).

The renewed enthusiasm for Ethereum and ETH may reflect the market's focus on stablecoins, asset tokenization, and institutional blockchain adoption—areas where Ethereum excels (see Chart 3). For example, including its Layer 2 networks, the Ethereum ecosystem carries over 50% of stablecoin balances and processes about 45% of stablecoin transactions (by dollar value).

Ethereum is also home to approximately 65% of the total value locked in DeFi protocols and nearly 80% of tokenized U.S. Treasury products. For many institutions building crypto projects, including Coinbase, Kraken, Robinhood, and Sony, Ethereum has been the network of choice.

The increased adoption of stablecoins and tokenized assets will benefit Ethereum and other smart contract platforms. Grayscale Research believes that stablecoins have the potential to disrupt certain areas of the global payment industry through lower costs, faster settlement times, and higher transparency (for more background, see "Stablecoins and the Future of Payments").

There are two types of stablecoin-related revenues: first, the net interest margin (NIM) earned by stablecoin issuers (such as Tether, Circle), and second, the transaction fees earned by the blockchain processing the transactions. Since Ethereum already holds a leading position in the stablecoin space, its ecosystem seems poised to benefit from the growth in stablecoin adoption through higher transaction fees.

The same applies to tokenization (the process of putting traditional assets on-chain) (for more background, see "Public Blockchains and the Tokenization Revolution"). The current tokenized asset market is relatively small (around $12 billion) but has enormous growth potential. Tokenized U.S. Treasuries are currently the largest tokenized asset class, with Ethereum being the market leader. In the alternative assets space, Apollo Global recently partnered with Securitize to launch an on-chain credit fund.

Moreover, the tokenized equity market, though small, is growing: Robinhood has launched tokenized shares of private companies like SpaceX and OpenAI, and eToro also plans to tokenize stocks on Ethereum. Apollo's products are available on multiple blockchains, while Robinhood and eToro's tokenized equity products are within the Ethereum ecosystem.

ETP Boom and More Trends

Investor interest in Ethereum has brought significant net inflows to spot ETH exchange-traded products (ETPs). In July, U.S.-listed spot ETHETPs saw net inflows of $5.4 billion, the largest single-month net inflow since these products were launched last year.

Currently, ETHETPs hold approximately $21.5 billion in assets, equivalent to nearly 6 million ETH, about 5% of the total circulating supply. Based on CFTC trader position reports, we estimate that only $1-2 billion of ETHETP net inflows come from hedge fund "basis trading," with the remainder being long-term capital.

Some publicly listed companies have begun accumulating ETH to gain token usage rights through equity instruments. The two largest "crypto fund management companies" holding ETH are Bitmine Emersion Technologies ($BMNR) and SharpLink Gaming ($SBET). These two companies collectively hold over 1 million ETH, with a total value of $3.9 billion.

The third listed company, BTCS ($BTCS), announced in late July plans to raise $2 billion through the issuance of common and preferred shares for additional ETH purchases (BTCS currently holds about 70,000 ETH, valued at approximately $2.5 billion). In addition to the net inflows of ETH ETP products, buying pressure from Ethereum enterprise fund management companies may have also driven the price increase.

Furthermore, Ethereum's share in the crypto derivatives market grew this month, indicating rising market speculation about the asset. In traditional futures listed on the CME, ETH futures open interest (OI) increased to around 40% of Bitcoin (BTC) futures OI (Chart X). In perpetual futures contracts, ETH's open interest increased to around 65% of Bitcoin's open interest. This month, ETH perpetual futures trading volume also exceeded Bitcoin perpetual futures.

Despite ETH being the focus for most of July, Bitcoin investment products continued to see steady investor demand. U.S.-listed spot Bitcoin ETPs saw net inflows of $6 billion and are estimated to currently hold 1.3 million Bitcoins. Several publicly listed companies have also expanded their Bitcoin fund management strategies. Market leader Strategy (formerly MicroStrategy) issued $2.5 billion in new preferred shares to purchase more Bitcoin.

Additionally, Bitcoin early pioneer and Blockstream CEO Adam Back announced the establishment of a new Bitcoin fund management strategy company—Bitcoin Standard Fund Management ($BSTR). The company will use Back's and other early adopters' Bitcoin as capital and will raise equity. BSTR's transaction is very similar to the earlier SPAC (Special Purpose Acquisition Company) transaction organized by Cantor Fitzgerald for Twenty One Capital—another large Bitcoin fund management strategy company supported by Tether and SoftBank.