Ethereum’s institutional footprint has continued to expand despite ETH trading a little above $1,900, more than 60% below its August 2025 high near $4,950. The disconnect reflects a growing tension in Ethereum’s economy: major financial firms are building products on the network, while much of the transaction activity supporting those products is moving to layer-2 systems that generate less direct fee revenue for Ethereum’s base chain.
Citigroup cut its 12-month ETH price target to $2,240 from $3,175 on July 1, citing weaker demand and persistent net outflows from Ethereum exchange-traded funds. The bank’s revised target placed it only modestly above ETH’s recent trading range, even as banks, brokerages and asset managers added Ethereum-based offerings.
The recent developments give Ethereum a larger role in tokenized funds, brokerage access and financial infrastructure. They have yet to establish a simple connection between enterprise adoption and demand for ETH itself, particularly as Ethereum’s scaling strategy shifts transactions away from the mainnet.
Financial firms add Ethereum-based products
JPMorgan Asset Management launched JLTXX, its second tokenized money market fund, on Ethereum in May. Tokenized funds place ownership records and settlement processes on blockchain rails, potentially allowing financial assets to move with more flexibility than conventional fund-transfer systems. The launch added to a set of experiments by large asset managers using public blockchains to issue or administer regulated financial products.
Robinhood followed in July with the introduction of Robinhood Chain, an Ethereum layer-2 network intended for financial services and tokenized assets. A layer-2 network processes transactions outside Ethereum’s main chain before periodically sending proofs or settlement information back to it. The approach is designed to increase capacity and reduce transaction costs, though it also means more activity takes place beyond Ethereum’s base layer.
Morgan Stanley also expanded crypto access through its brokerage business, allowing eligible E*TRADE customers to trade and hold Ethereum, Bitcoin and Solana. The move places ETH within conventional brokerage account workflows, where clients can manage crypto alongside securities and cash products.
Former Ethereum Foundation members created Ethereum Institutional, a nonprofit organization, in July to support enterprise use of the network. Its formation illustrates how Ethereum’s advocates are trying to meet demand from financial institutions for technical guidance, policy engagement and standards around tokenized assets.
Taken together, the launches show that institutions are increasingly treating Ethereum as a settlement and issuance environment rather than solely as a speculative asset. That use case could be commercially valuable for the network, but it does not automatically translate into higher ETH prices.
Layer-2 growth changes the fee equation
Ethereum’s long-running scaling plan is central to that gap. The network has encouraged applications to move high-frequency activity to layer-2 networks, which can execute transactions more cheaply while relying on Ethereum for settlement and security.
L2Beat data shows that layer-2 systems have processed the majority of transactions in the Ethereum ecosystem since 2024. This is a practical success for the network’s capacity ambitions: users can access lower-cost transfers, decentralized finance applications and tokenized-asset platforms without competing for limited mainnet block space.
The economic trade-off is that fewer transactions occur directly on Ethereum’s base layer. Ethereum transaction fees are paid in ETH, and a portion of those fees is burned, permanently removing tokens from circulation. When activity migrates to lower-cost layer-2 networks, mainnet fees and the amount of ETH burned can decline unless aggregate usage grows enough to offset the lower cost per transaction.
That makes Ethereum’s adoption story more complicated than one based on raw transaction volume. A network can add users, applications and institutional products while the fee flow accruing to the base chain remains subdued. ETH holders are therefore more exposed to the details of Ethereum’s settlement economics, data availability fees and layer-2 design than they were when most activity took place directly on the mainnet.
Buterin sets out a multi-year rebuild
Vitalik Buterin, Ethereum’s co-founder, addressed the network’s longer-term technical direction in July with a roadmap titled “Lean Ethereum.” The plan describes a three-to-four-year rebuilding effort focused on privacy, security and resistance to future quantum computing threats.
Buterin compared the scale of the work to Ethereum’s 2022 transition from proof of work to proof of stake. The new roadmap includes work intended to simplify parts of Ethereum’s protocol while strengthening privacy tools and improving the network’s ability to withstand cryptographic attacks from sufficiently capable quantum computers.
Privacy has particular relevance for institutions. Public blockchains allow anyone to inspect transaction histories, a feature that can conflict with the confidentiality requirements of trading firms, asset managers and corporate treasuries. Stronger privacy options could make Ethereum more usable for financial activity that cannot be conducted openly without revealing positions, counterparties or business strategies.
The roadmap remains a multi-year proposal rather than an immediate catalyst for ETH demand. Its value lies in preserving Ethereum’s position as a technically credible settlement layer while institutions test tokenized funds, digital securities and blockchain-based payment systems.
Forecasts remain far apart
Market forecasts illustrate the uncertainty surrounding ETH’s future value. Citigroup’s $2,240 12-month target is based on a cautious view of demand and ETF flows. Standard Chartered has forecast ETH at $4,000 by the end of 2026 and $40,000 by 2030, a projection that assumes much stronger long-term adoption.
Tom Lee, chairman of BitMine, has projected that ETH could eventually reach $250,000, which would imply a market capitalization of roughly $30 trillion. Such estimates depend on Ethereum capturing a far larger share of global financial activity and converting that activity into durable demand for the token.
ETH’s current market performance offers a more restrained reading. Institutional products are arriving, and Ethereum’s developers are preparing extensive protocol changes, but the network’s scaling model has made direct value capture less immediate. The next phase of Ethereum’s market debate will depend less on whether institutions use blockchain infrastructure and more on whether the activity settling through Ethereum produces sustained fee revenue, ETH burn and demand for the asset.
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