Since ETH entered its current uptrend, the market has begun to share data on ETH unstacking with each short-term volatile correction. However, from a supply-demand perspective, the demand generated by institutional consensus currently far outstrips the supply of unstacking, and we believe that a long-term, fully loaded unstacking situation is unsustainable. Since treasury companies like SharpLink began purchasing ETH, US-listed corporate entities holding ETH have already held nearly $20 billion worth of ETH, representing 3.39% of the total supply. Bitmine, of which Bitmine is 75% of the way to its target of 5% total ETH holdings. With the further implementation of crypto-friendly policies and Wall Street's consensus on ETH's long-term value, the ETH "fleet" has only just begun. With the impending interest rate cut cycle, we have raised our long-term ETH target price, believing that ETH's market capitalization will surpass BTC within one to two bull-bear cycles. 1. Unstaking Data: Since the Ethereum Pectra (Prague + Electra) mainnet upgrade took effect in May 2025, the theoretical withdrawal rate for staked tokens has been hard-capped at 256 ETH/epoch (1 epoch ≈ 6.4 minutes). Converted to daily values, this translates to a theoretical cap of 256 × (1440 ÷ 6.4) = 256 × 225 = 57,600 ETH/day. Since July 18th, the ETH mainnet unstaking queue has been full. Currently (August 24th), there are 873,849 ETH waiting to be unstaked, which will take 15 days and 4 hours to process. The amount of ETH that can be unstaked in a week is capped at 57,600*7=403,200 ETH. Last week, the ETH Treasury purchased 531,400 ETH. As long as the Treasury continues to buy, even if 100% of the unstaked ETH enters circulation, it can be fully absorbed. We believe that the current network value of ETH is not fully recognized by the market, and that not all unstaked ETH has entered circulation. As consensus continues to build, the full unstaked state will also improve. Simply put, unstaking doesn't represent the full market supply. While the total amount of unstaking shows a certain negative correlation with rising ETH prices, we believe this supply won't drive ETH's upward trend into a downward trend. II. Analysis of Treasury Companies and ETF Demand Since June 2025, ETH treasury companies, such as SharpLink, have entered the market, confirming our previous speculation that the US will prioritize ETH as a new platform for financial blockchain infrastructure (for details, see our articles "On the Eve of the Surge: Why We Are Bullish on ETH" and "A Storm is Coming: Market Convergence Will Drive Value Discovery in ETH," published on June 11 and July 3). The entry of institutional purchasing power, represented by treasury companies, has fundamentally changed the dominant force behind ETH's price fluctuations. 1. Treasury Companies' Operating Logic - Coin Growth: Premiums The market value premium (MNAV) of cryptocurrency treasury companies stems from investors' recognition of the growth potential of the assets they acquire. DAT companies increase their holdings of crypto assets through financing (either through share issuance or debt), creating a flywheel effect: more crypto assets → balance sheet expansion → rising stock prices → more financing → further increases in holdings. This cycle amplifies market optimism for coin-hoarding stocks, driving up MNAV premiums. This flywheel effect is exemplified by the success of MicroStrategy, and ETH possesses several characteristics that make it more suitable as a treasury asset compared to BTC.
2. What is the difference between ETH Treasury companies - assets with inherent returns
Unlike BTC, which is a limited asset with purchased scarcity, ETH, as the largest DeFi network in the crypto world, will naturally generate returns if held on a large scale.
(1) Staking income: Since the "merger" in 2022, Ethereum has switched to the PoS mechanism, giving ETH the attributes of an interest-bearing asset. At the same time, its ecosystem supports high-yield activities such as DeFi and RWA. These characteristics provide DAT with a stable source of cash flow, forming the basis of the "cash flow premium". As of August 2025, the total amount of Ethereum staked reached 36 million ETH, accounting for 30% of the total supply, with an average annualized yield of approximately 2.95% (the actual yield is approximately 1.5%-2.15%). The risk-free return of 1.5% is similar to the cash flow of traditional bonds. (2) Liquidity income: Obtain additional income by providing liquidity to DeFi protocols in the Ethereum ecosystem. In 2025, the TVL of Ethereum DeFi protocols was approximately US$120 billion, and the annualized yield of liquidity mining was generally between 2–10%. Assuming that hoarding stocks provide liquidity through DeFi protocols, a conservative estimate is that they can obtain an annualized yield of 3.5%. Combining staking income (1.5%) and liquidity income (3.5%), hoarding stocks can achieve an annualized cash flow income of approximately 5%. Using the discounted cash flow (DCF) model, assuming a discount rate of 5%, the cash flow premium is 1x MNAV, that is, the total MNAV multiple is 2x. (3) Other premiums: Ethereum's EIP-1559 mechanism gives ETH a potential deflationary characteristic by destroying basic transaction fees. In 2025, Ethereum is expected to issue a net 730,000 ETH (annual inflation rate of approximately 0.6%), but as the network is destroyed. If ETH experiences net deflation in the future, ETH prices may only rise, amplifying the cash flow gains of coin hoarders and indirectly increasing the MNAV premium. 3. Treasury purchases are just beginning. ETH treasury companies like BMNR and SBET have high purchase costs and ample reserves, while overall traditional finance purchases are still in their initial stages. According to data compiled by Ember, BitMine (BMNR) has accumulated 1,523,373 ETH since July 9th, at a cost of $5.68 billion and an average price of 3,730 ETH. SharpLink (SBET) has accumulated 740,760 ETH since June 13th, at a cost of $2.57 billion and an average price of 3,478 ETH, including 1,388 ETH rewards earned through staking. As the price of Ethereum continues to rise, the holding costs of both companies will increase accordingly.
From the perspective of future financing capabilities:
BMNR: According to the Prospectus Supplement released on August 12, 2025, BMNR has increased its total ATM amount to US$24.5 billion. It is estimated that it has raised approximately US$4.45 billion through the ATM mechanism and holds approximately 1.52 million ETH. In theory, there is still approximately US$18-20 billion available. If the ETH price remains at $4,700 per coin, BMNR could increase its holdings by approximately 4.26 million ETH, bringing its potential total holdings to approximately 5.78 million ETH, approaching its target of 5% of total holdings. Since launching its ETH treasury strategy in June 2025, SBET:SharpLink has rapidly accumulated approximately 740,760 ETH through ATM financing (accumulating approximately $1.2 billion) and registered direct sales. Its ATM limit has been adjusted to a maximum of $6 billion from its initial limit. Additionally, it plans to raise approximately $600 million through private placements and other methods. Assuming all funds raised are used to purchase ETH, based on the cost of ETH, the remaining ATM balance is expected to purchase 851,000 ETH. Currently, US-listed corporate entities holding ETH hold nearly $20 billion, representing 3.39% of the total supply. Bitmine is 75% of the way to its goal of holding 5% of the total ETH supply. Daily ATM funds available: MicroStrategy is a leading example of a Bitcoin treasury strategy, and its trading volume varies significantly during bull and bear markets. MicroStrategy implemented a Bitcoin treasury strategy in 2020. During the 2020–2021 bull market, its stock price rose from $13 to a peak of $540, leading to a significant increase in daily trading volume. However, this is significantly influenced by market activity and BTC prices. Based on recent stock prices and average trading volume, daily trading volume is estimated to be between $3.5 billion and $7 billion. During the 2022 bear market, Bitcoin's price plummeted from $69,000 to $16,000, MicroStrategy's stock price halved, and trading volume significantly shrank, dropping to an average daily volume of $200 million to $500 million. A similar situation may arise for ETH DATs: BitMine's current daily trading volume has reached $2 billion, peaking at $6 billion, approaching or exceeding MicroStrategy's peak during the previous bull market, garnering significant market attention. SBET's current daily trading volume fluctuates significantly, averaging 50 million shares and approximately $1 billion in daily trading volume. If the market enters a bear market, DAT trading volume could shrink to $100 million to $500 million per day, similar to MicroStrategy's performance in 2022. Assuming 10%-20% of daily trading volume can be converted into ATMs, then if current trading volume continues, $2 billion to $4 billion can be raised weekly to purchase ETH. Based on the ATM cap, this is expected to continue for three months.
4. ETFs' long-term performance remains strong
ETFs, as passive funds that have achieved success through large-scale and low-cost investment, have become the preferred choice for traditional large-scale fund allocation. From May 16th to August 15th, the ETH ETF saw 14 consecutive weeks of net inflows, with a peak single-week inflow of $2.85 billion and a net asset value representing 5.38% of the total supply. Of this, 19.2 billion (68%) of the ETH was accumulated during these 14 weeks, with an estimated purchase cost of approximately $3,600. BlackRock's ETHA is the largest ETF, holding approximately 2.93% of the tokens and currently has a market capitalization of $17.2 billion. Since April 2025, ETHA has seen weekly net inflows of approximately $8 billion, with a peak single-week net inflow of $2.32 billion. Currently, the global gold ETF (combined with ETFs/ETPs worldwide) stands at $386 billion, Bitcoin at $179.5 billion, and Ethereum at only $32.6 billion. If Ethereum's narrative is sustainable, it will require $140 billion in incremental buying volume to match the current Bitcoin ETF size. 5. Market bias shifts from BTC to ETH trading. Judging from the open interest and trading volume of contracts, BTC has clearly cooled, with funds concentrated in ETH. At the beginning of May, BTC accounted for 73% of total open interest in futures contracts, but now stands at just 55%; ETH's share has risen from 27% to 45%. Looking at contract trading volume, BTC's share has dropped from 61% at the beginning of May to 31% currently, while ETH's share has risen from 35% at the beginning of May to 68% currently, showing a continuously increasing share. Judging from the recent behavior of on-chain whales, there is a shift in the trend of selling BTC and buying ETH. According to data from @ai_9684xtpa, starting on August 20th, an ancient BTC whale, dormant for seven years, sold some of its BTC, swapping 71,108 ETH (valued at approximately $304 million) for ETH at an average cost of approximately $4,284 per ETH. Its total holdings subsequently increased to 105,599 ETH (valued at approximately $495 million). At the same time, it established a long ETH position on Hyperliquid and pledged 269,485 ETH (worth $1.25 billion) to the ETH beacon chain on August 25, directly surpassing the Ethereum Foundation's holdings (231,000 ETH). During Q2 2025, on-chain Ethereum whales (wallets holding 10,000 to 100,000 ETH) increased their holdings by 200,000 ETH ($515 million) in Q2 2025, while the total amount of ETH held by super whales (holding more than 100,000 ETH) has rebounded from its historical low of 37.56 million ETH in October 2024 to over 41.06 million ETH, an increase of 9.31% since October 2024.
Third, BTC Chip Structure Remains Relatively Stable
Due to the shift in sentiment from BTC to ETH, BTC has recently shown relative weakness. ETFs have seen significant net outflows, while on-chain whales have seen a large number of them exchanging BTC for ETH. Based on the four-year cycle of the cryptocurrency market, this bull market will reach a similar length as previous bull markets in just two to three months. Consequently, the market is concerned: Is BTC about to enter a bear market? If so, how can ETH maintain its independence and maintain an independent upward trend? We believe the current US fiscal cycle is longer than during the previous two crypto bull markets. Meanwhile, BTC's chip structure remains relatively stable and is currently experiencing volatility. The figure below shows the distribution of BTC chip costs. The gray bars represent the current price, and the blue boxes indicate the main areas of chip concentration: 93,000-98,000, 103,000-108,000, and 116,000-118,000. These three areas have a significant amount of accumulated chips, and a large amount of low-cost chips are changing hands within these ranges, forming relatively strong support. Currently, chips in the 116,000-118,000 range are experiencing slight losses, while chips in the 93,000-98,000 and 103,000-108,000 ranges are in profit. While BTC's price is currently relatively weak, it has found support near 11,000. There are still two larger support areas below, and the overall price is in a state of volatility. Furthermore, the current cost of holding short-term holders is approximately 108,800. When BTC trades above this level, short-term holders remain profitable overall, and panic selling is unlikely. Historically, there have been two rebounds near the short-term holder cost line in early 2024, and another case in February 2025, when the price first touched this cost line before falling below it. If BTC falls below this cost line, it will enter a mid-term correction, impacting the overall trend of the crypto industry.
Currently, BTC is at a critical position. After hitting the cost line yesterday, it rebounded. This week, we should pay close attention to whether BTC can stabilize at this position.
Fourth, the continuously improving macroeconomic environment
1. Fundamental reshaping of valuation logic under US regulations
In July 2025, the US GENIUS Stablecoin Act was officially enacted. Compared with BTC, the stablecoin is pegged 1:1 to the US dollar, and its higher capital efficiency makes it more suitable as a debt repayment tool. Stablecoins can also promote the efficient flow of global capital into the US dollar system, supporting the purchase of US Treasury bonds and the injection of liquidity into on-chain financial assets, thereby promoting the digital expansion of US dollar hegemony. Currently, the total market capitalization of stablecoins is $275 billion, while Bitcoin's market capitalization is $2.2 trillion. The global value of Bitcoin mining equipment is estimated to be between $15 billion and $20 billion, while Ethereum's market capitalization is $550 billion, with a staked value of approximately $165 billion. Whether replacing Bitcoin's role in partially absorbing debt, promoting the inclusion of assets on-chain, or accommodating new payment systems, the scale of stablecoins will accelerate in the long term, rapidly growing to a trillion-dollar market size. As the primary infrastructure for stablecoins and DeFi, Ethereum's price benefits both from ETH purchases driven by the security of on-chain financial networks and from the inherent DeFi model: stablecoins inject foundational liquidity, the DeFi ecosystem uses stablecoins to create leverage and derivatives to purchase more ETH, and a surge in trading activity drives gas fees and promotes ETH burn. Using transaction fees (gas fees) and Proof of Stake (PoS) from the Ethereum network as cash flow revenue, a discounted cash flow (DCF) model was used to perform a rough valuation. Under optimistic conditions (7% growth, 9% discount rate, and leverage factor 3), ETH's market capitalization has the potential to exceed $3 trillion, surpassing the current market capitalization of BTC. 2. An interest rate cut cycle is imminent. On August 22, Powell delivered a speech at the Jackson Hole conference, stating that inflation remains elevated, but downside risks to employment are increasing. With policy remaining in a "restrictive" range, the committee will proceed cautiously and adjust its policy stance as necessary. Analysts generally believe that a September rate cut is almost certain and represents a dovish shift. Following the speech, crypto-related stocks and ETH-related assets surged, with ETH recovering all of its losses from the beginning of the week and reaching a record high of 4,887.
In the past interest rate cut cycle, ETH generally performed better than BTC. With the return of members of Congress after the September holiday, the promotion of encryption policies will advance rapidly. The expectations of ETH's financial chain and DeFi prosperity have not yet been realized, providing a positive macro environment for ETH market. 3. Stablecoins and RWAs: The Top Choice for Development The US government and financial institutions are continuously pushing for financial blockchains. Currently, the scale of stablecoins has reached $275 billion, and the scale of RWAs has reached $26.4 billion. Of this, over 50% of stablecoins run on the Ethereum network, and RWAs account for 53.4% of Ethereum. Of the total DeFi TVL of 1,611, over 60% is deployed on Ethereum. 95% of Belaid's BUIDL funds are deployed on Ethereum, and 80% of Securitize's tokenized shares are deployed on Ethereum. In this article, we analyzed data from a subset of clear and significant sources. Overall, recent supply-side unstaking data will not alter ETH's upward trend. On the demand side, the foreseeable upper limit for new purchases from both treasury companies and ETFs remains far from being reached, and the cost of establishing a position is high. With fundamental shifts in financial logic under US regulations, ETH possesses the potential for both internal and external growth to drive its price. As the macro environment improves and policies continue to develop, ETH's market capitalization will surpass BTC in the long term.
