Ethereum’s Role as a Digital Economic Foundation Grows Amid Regulatory Advances

• U.S. stablecoin bill advances, boosting Ethereum’s role in national infrastructure.
• Institutional interest in Ethereum surges with $1.25B ETF inflows and treasury adoption.
• Ethereum’s long-term valuation could reach $740K, driven by growing digital economy use.

Ethereum (ETH) is becoming recognized as a core infrastructure for the expanding digital economy. Recent regulatory developments, including the anticipated passage of the U.S. stablecoin bill, are solidifying blockchain technology’s status as part of the national infrastructure. This legislation positions stablecoins as essential instruments for businesses and financial institutions, with major implications for Ethereum’s role and adoption.

The stablecoin bill nearing passage enshrines blockchains within the system of U.S. infrastructure law. This shift marks a major adoption step and a catalyst for Ethereum’s expanding use. Circle’s USDC stablecoin, predominantly built on Ethereum, exemplifies this development; approximately 75% of USDC circulation resides within the Ethereum ecosystem. The bill is expected to encourage Wall Street firms to accelerate their exposure to stablecoins.

Moreover, traditional finance is integrating blockchain more deeply. JP Morgan’s recent initiative to tokenize bank deposit stablecoins on Base, a layer 2 network secured by Ethereum, highlights the transition of conventional financial assets onto Ethereum-based platforms. Coinbase is also positioned to serve as a gateway for institutional flows into this ecosystem.

Ethereum’s Position as a Settlement Layer

Ethereum’s architecture underpins the majority of stablecoins and tokenized assets in circulation. Its blockchain operates as a permissionless, censorship-resistant, and tamper-evident ledger. Through mechanisms such as slashing and transparent validation, Ethereum maintains security and has increasingly decentralized over time. This robust design supports its function as a settlement layer for tokenized value across decentralized finance (DeFi) and institutional applications.

Market data shows rising institutional engagement with Ethereum. Over a recent 19-day period, inflows to ETH exchange-traded funds (ETFs) totaled approximately $1.25 billion. Additionally, some organizations have adopted Ethereum as a treasury asset. These trends correspond with a price recovery from recent lows, exceeding a 100% increase in value.

Valuation Benchmarks and Future Outlook

In a comparative analysis, the valuation potential for Ethereum is benchmarked against global reserves like oil, gold, bond market, global GDP and money supply M2. The median market capitalization of these assets is around $89 trillion implying a long market valuation target of ETH of nearly 740,000 per token.

In the short-term (3 years) and the medium-term (7 years), Ethereum is priced at 8,000 and 80,000 dollars per token respectively, which translates into approximate market capitalization of 1 trillion and 10 trillion dollars. These metrics indicate the increased platform Ethereum functions, as a settlement platform of digital assets, tokenization, and decentralized finance globally.