Ethereum Enters a New Decade: Institutional Reserve Race Boosts Trillion-Dollar Network

Ethereum officially enters its second decade, entering a brand new stage of development. As the world's most secure and decentralized programmable blockchain, Ethereum has become the preferred platform for institutional investors. Just as Bitcoin has earned the title of "digital gold," Ethereum's native asset ETH is also gaining recognition as "scarce digital oil."

Major institutions are actively increasing their holdings of ETH as a long-term strategic reserve. As of 2025, the strategic ETH reserves have exceeded 1.7 million coins. With the increase in institutional ETH holdings, ETH has become the first digital commodity capable of generating returns.

ETH can be seen as an "internet bond," and staking provides institutions with a risk-free way to accumulate returns. As the adoption rate of Ethereum continues to rise, ETH is becoming increasingly scarce, and institutions are starting to focus on staking and distributed validators due to their significant security advantages.

Institutional investors recognize that Ethereum will drive the development of the global on-chain economy. This is one of the main catalysts for Ethereum's future as a trillion-dollar network.

The Era of Ethereum Institutions Has Arrived

Institutional investors are embracing Ethereum. As major players on Wall Street discover the potential of innovations such as stablecoins, DeFi, and RWA, Ethereum is becoming their preferred decentralized platform. Several large financial institutions are developing on Ethereum, as it dominates these verticals while also offering significant decentralization and security advantages.

ETH is also gradually becoming a reserve asset. In the past few years, several large companies have included BTC in their reserve assets. However, recently, a wave of listed companies, DAOs, and crypto-native foundations have started to accumulate ETH as a long-term holding asset. Currently, over 1.7 million ETH( worth $5.9 billion) has been locked in reserve assets, with the total reserves doubling year-on-year.

Ethereum is becoming the next generation of global financial infrastructure. Institutional investors are reserving ETH because they recognize that ETH is the monetary foundation of this infrastructure. ETH is the first digital asset to possess reliable neutrality, scarcity, utility, and yield. BTC is recognized as the first reserve asset of cryptocurrency, while ETH is the first yield-bearing reserve asset.

Why Institutions Prefer "Digital Oil" Over "Digital Gold"

Bitcoin is undoubtedly the world's first digital gold. As a non-sovereign store of value, Bitcoin possesses unique attributes that are highly attractive to institutions. However, Ethereum is a more dynamic asset, as it powers the global on-chain economy. As the world moves towards on-chain development, the utility and scarcity of Ethereum will increase simultaneously. If Bitcoin is digital gold, then Ethereum is digital oil.

Institutions are beginning to favor digital oil over digital gold, and this trend is expected to continue in the next decade. There are three reasons:

1. BTC is in a dormant state, while ETH is actively contributing. Bitcoin has succeeded by acting as a passive store of value. In contrast, Ethereum's success is due to its consistent high output. Ethereum is the indispensable fuel for the world's most decentralized and secure smart contract blockchain. Every operation in Ethereum's vast decentralized finance ecosystem, every NFT minting, and every layer two network settlement requires ETH as transaction fees. Since the launch of EIP-1559 in August 2021, Ethereum has burned approximately 4.6 million ETH, which is worth about $15.6 billion at current prices, indicating that this asset plays the role of digital oil in the on-chain economy. Today, Ethereum secures approximately $237 billion in value across L1 and top-tier L2 networks, and as the global economy continues to shift on-chain, the demand for ETH will persistently grow. Ethereum holds a 57% share in the RWA market and a 54.2% share in the total supply of stablecoins. In short, Ethereum holds advantages across multiple metrics, and ETH is the driving force of its ecosystem.

2. BTC has an inflationary tendency, while ETH is gradually becoming deflationary. The supply schedule of BTC is fixed, with the current issuance rate at approximately 0.85%, which will programmatically decrease over time. As the block reward halves every four years, miners will increasingly rely on transaction fee income to sustain operations. Some believe that the security budget of BTC poses a potential threat. Ethereum adopts a different monetary policy, directly linked to economic activity. The total issuance cap for ETH is 1.51%, aimed at incentivizing network security, but due to approximately 80% of transaction fees being burned through EIP-1559, the net issuance rate of ETH has averaged only 0.1% per year since the merge. ETH often experiences net deflation, and as demand for Ethereum block space grows, the total supply ( is currently slightly below 120 million ETH ) and is expected to decrease. In other words, as Ethereum gains popularity, ETH will become increasingly scarce.

3. BTC does not generate any yield, while ETH is a yield-generating asset. Bitcoin itself does not produce yield. However, ETH is a high-yield digital commodity. ETH stakers can lock Ethereum as validators and earn an actual yield of about 2.1% at present, with a nominal yield - new issuance (. Stakers can obtain ETH issuance and part of the transaction fees ) that will not be destroyed (, and there is no counterparty risk, which incentivizes long-term holding and active network participation. The difference between ETH and all other major crypto assets is that as the economic throughput of Ethereum expands, the yield for validators will also increase.

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ETH as a leading reserve asset globally

The reason why ETH has become the world's leading reserve asset is due to its unique attributes. ETH meets three core requirements in a way that is unparalleled by other assets:

Pure settlement collateral. As the new economy continues to build on tokenized assets that bear the risks of issuers and jurisdictions, the financial system requires a trustworthy, neutral, non-sovereign collateral asset. This asset is ETH. Apart from BTC, ETH is the only "pure" collateral in the on-chain economy, capable of completely resisting external counterparty risks. Ethereum's $237 billion collateral value makes ETH the cornerstone of the next generation financial system, possessing anti-censorship properties.

Strong liquidity. ETH is the most liquid and primary asset in DeFi trading pairs. The role of ETH in the on-chain economy is similar to that of the US dollar in the traditional foreign exchange market. The deep liquidity and wide applicability of ETH drive DAOs, foundations, and listed companies to compete in accumulating ETH as a strategic asset. "Strategic ETH reserves" are rapidly expanding, and hoarders also benefit from its programmability. BTC remains idle in the treasury, while ETH can be deployed through use cases such as staking and collateralized lending.

Native protocol yields. Corporate financial executives pursue returns, but achieving yields without taking on significant credit or counterparty risk is not easy. ETH staking offers a risk-free return of 2-4%, with yields coming directly from the returns generated by L1 staking. This means that financial executives can obtain an efficient tool that generates cash flow for reserves, directly linking their balance sheets to the growth and security of the new economic base layer.

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"Internet Bonds"

Due to staking generating native protocol yields, ETH has become the world's first "internet bond". Historically, corporate treasurers typically allocated funds to sovereign bonds valued at approximately $80 trillion ) and corporate bonds valued at about $40 trillion (. ETH staking has created a new category of bonds that have a broad understanding of issuance, risk, and yield conditions. Today, this market is several orders of magnitude smaller than the sovereign and corporate bond markets. However, unlike corporate and sovereign bonds, ETH has no maturity date, and yields are generated perpetually. Since the yields are generated by the protocol, ETH staking also eliminates counterparty risk; there is no default risk from bond issuers.

ETH is a global, censorship-resistant commodity, whose returns are not affected by traditional interest rate cycles. Currently, the Federal Reserve's fund rate is between 4.25% and 4.5%. Meanwhile, the current real yield for ETH stakers is about 2.1%. Due to the decline in borrowing costs, capital allocators tend to choose risk assets over short-term government bonds when interest rates fall. Institutions still show interest in Ethereum staking despite higher yields on short-term government bonds, indicating their strong belief in it. If interest rates decline, these institutions can benefit from the higher yields of the underlying assets, and as market risk appetite increases, the underlying assets will also appreciate.

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Major institutions are competing to accumulate Ether

Cryptocurrency has firmly established its status as a legitimate asset class, with Bitcoin serving as the gateway for institutions entering this space. However, Ethereum is the natural evolution of this trend. Ethereum combines the value storage appeal of Bitcoin while offering native yields and securing the safety of the ever-evolving on-chain economy, including stablecoins, RWAs, and DeFi. Strategic Ethereum reserves highlight this significant shift: institutions are accumulating ETH as a long-term strategic reserve asset.

Many publicly listed companies and Ethereum native organizations have implemented ETH fund management strategies. Most strategies aim to generate yields, while others view ETH as the base currency for long-term operations. Many organizations balance both.

Data shows that currently about 1.7 million Ether ), valued at approximately 5.9 billion USD, accounts for about 1.44% of the supply ( held in strategic reserves.

Since the beginning of the strategic reserve competition in early the second quarter, the amount of ETH accumulated by institutions has far exceeded the ETH issuance paid to validators. As this competition intensifies, ETH is facing increasing deflationary pressure.

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Ether is a yield-bearing asset

Clearly, various institutions are adopting the Ethereum network, and ETH has also become their preferred supporting asset. Various signs indicate that as government bond yields decline, the demand for ETH staking among institutions will soar, as these institutions hope their capital can achieve real returns, and staking can provide this return with minimal risk. Distributed validators play a key role in this process, as institutions place great emphasis on security and reducing counterparty risk in their capital allocation strategies.

Why can staking win over ) and how do distributed validators fit into it (?

ETH staking is structurally different from all other ETH yield options. This is because it offers a predictable protocol-level yield linked to security incentives and network adoption.

Among all the yield strategies that Ethereum holders may adopt, staking is the only option that does not entail borrower, counterparty, or credit risk.

Some institutions related to Ethereum have recognized that staking is the best way for their held assets to generate returns. As more and more institutions adopt strategic ETH reserve strategies, staking will, in turn, attract more institutions, as it provides a low-risk way to earn returns from "internet bonds."

For institutions seeking returns, ETH staking is the best option, as it offers an almost risk-free yield compared to other strategies.

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However, even though the financial executives recognize that native staking is clearly a strategically wise choice, he