Ethereum in a period of transformation: Accelerated tokenization, ETH regains its position

The year 1011 left deep scars on the cryptocurrency market, but at the same time opened new perspectives. While investor sentiment is still recovering, a clear trend of integrating crypto assets with traditional financial structures is becoming more evident. This is not an ordinary market correction – we are witnessing a fundamental shift in the narrative, with Ethereum taking a central position.

A New Era of Consensus: From Wall Street to Blockchain

In December 2024, SEC Chairman Paul Atkins publicly expressed a vision that would have been unimaginable a few years ago: the potential transfer of a significant part of the US financial system to blockchain infrastructure within less than ten years. This statement signals profound changes in the thinking of financial elites.

The primary argument concerns transparency: tokenized securities on the blockchain enable full identification of shareholders, asset locations, and ownership structures in real-time – something traditional systems cannot provide. Additionally, blockchain technology could potentially accelerate settlements from T+1 to T+0, drastically reducing systemic risk exposure between the transaction and final settlement.

The convergence of interests is already tightening: political elites, Treasury, traditional brokerage firms (like Cantor), technology companies, and the cryptocurrency ecosystem are co-creating a new value chain. Stablecoins – mainly backed by short-term US Treasury bonds – are a key link. Through RWA (Real World Assets) protocols on Ethereum’s L1 and L2 layers, traditional assets (bonds, mortgages, receivables) are gradually being tokenized. All of this is ultimately settled on the main Ethereum network or its layer 2 solutions, making ETH a fundamental resource in this ecosystem.

Ethereum Captures Value: The Fusaki Update Changes the Economics

The recent Fusaki update marked a breakthrough for Ethereum’s economics, although the market initially underestimated it. Through EIP-7918, the protocol introduced a dynamic base fee for blob fees, linking the minimum data cost to mainnet fees. Specifically: L2 layer operations can no longer operate almost cost-free, and the generated fees are burned back to ETH holders via a burning mechanism.

The evolution of this model occurs in three stages. The London upgrade introduced burning of the execution layer. Dencun extended this to blobs for L2 data, but during periods of low demand, fees dropped to nearly zero. Fusaki closes this gap, creating a fixed temporal dependency between L2 activity and ETH burning – a proportional relationship between increased usage and token deflation.

Empirical data clearly shows: within one day, blob fees reached levels 569 billion times higher than before Fusaki, burning over 1500 ETH daily. Blob fees now account for 98% of total burning, suggesting that as L2 activity grows, ETH could return to a deflationary state – structurally different from previous periods.

Technical Position and Market Psychology

During the crash in 1011, leveraged futures positions on ETH were wiped out, leaving the market in a state of extreme fear. According to Coinbase data, speculative leverage in the crypto ecosystem hit a historic low of 4%. Many early investors, especially those holding the Long BTC/Short ETH (traditionally effective in Bear Markets), liquidated their positions and withdrew.

However, technical indicators suggest an opposite scenario. The ETH/BTC ratio has been trending sideways since November, while the supply of ETH on trading platforms (13 million coins, ~10% of the total supply) is at historically low levels. This hints at a potential squeeze on short positions if sentiment shifts.

An additional factor is political and economic signals from the USA and China. Both powers indicate a favorability towards looser monetary and fiscal policies in 2025–2026. America is outlining tax cuts, interest rate reductions, and regulatory easing, while China is moving toward financial stabilization. In such an environment, low- or zero-inflation for ETH, which remains in the “buy zone during panic,” could create favorable conditions for a trend reversal – especially when capital and emotions have not yet returned to normal.

The current ETH price of $3.12K, with a 24-hour increase of +0.43% and a market cap of $376.24B, shows that the market is in an early recovery phase but far from a speculative peak.