Preface

On August 7, 2025, the United States officially signed an executive order allowing 401(k) retirement plans to invest in a diverse range of asset classes, including crypto assets. This marks the most structurally significant upgrade to the system since the Employee Retirement Income Security Act (ERISA) of 1974. The policy relaxation, combined with the entry of long-term funds such as university endowments, Wall Street narrative driving, accelerated inflows into ETFs and futures markets, and macro tailwinds from expectations of Federal Reserve interest rate cuts, has collectively propelled Ethereum to gain funding momentum and pricing power that surpasses Bitcoin in this market cycle. This article will systematically analyze the deep logic behind ETH's transformation into a financial asset from the perspectives of institutional breakthroughs, institutional layouts, and the evolution of market narratives, while also looking ahead to structural opportunities and investment strategies in the coming months. As of now, the total market capitalization of the global cryptocurrency market has exceeded $4 trillion, setting a new historical high. Compared to about $1.08 trillion at the beginning of 2023, this represents an increase of nearly four times in less than three years, reflecting the explosive power of the market driven by institutionalization. According to CMC data, the market capitalization rose by about 8.5% in the past week, with a cumulative increase expected to be in the range of 10-12% over the past two weeks. This trend is not driven by a single market event but is the result of a combination of institutional policy support, changes in institutional allocation, market structure optimization, and narrative catalysis. This research report will focus on three main lines—policy catalysis, institutional confidence endorsement, and narrative and market structure—to deeply analyze the logic of the ETH bull market and its future pricing path, while providing a comprehensive perspective for investors through historical comparisons, data modeling, and risk analysis.

1. Policy Catalysis: The Structural Significance of 401(k) Opening

1.1 Historical Context: The Pension Revolution from Stocks to Crypto Assets

To understand the significance of this 401(k) opening to crypto assets, we need to place it within the context of over a century of evolution in the U.S. pension system. The last "paradigm shift" occurred after the Great Depression. At that time, pensions were primarily based on a defined benefit (DB) system, with funds locked into a "Legal List" of government bonds, high-quality corporate bonds, and municipal bonds, driven by a single logic—safety first. The stock market crash of 1929 devastated corporate cash flows, leaving many employers unable to meet their obligations, forcing the federal government to step in with the Social Security Act. After the war, bond yields fell steadily, with municipal bonds once dropping to around 1.2%, which could not cover the long-term promised returns. It was in this imbalance of "safety and returns" that the "Prudent Man Rule" was reinterpreted in the 1940s and 1950s: it was no longer about "only buying the safest," but rather "the overall portfolio must be prudent," leading to a limited inclusion of stocks. In 1950, New York allowed pensions to allocate up to 35% to equity assets, followed by states like North Carolina; there was significant opposition—"gambling with workers' hard-earned money"—but history chose growth. The ERISA of 1974 wrote the modern framework of "prudent investment" into national law, deeply binding pensions to capital markets, which later contributed to the long bull market in U.S. stocks and the modernization of financial markets.

On August 7, 2025, Trump signed an executive order that pushed the pendulum of "risk-return rebalancing" to the forefront once again: 401(k) plans can now invest in private equity, real estate, and for the first time, crypto assets; it also requires the Department of Labor to collaborate with the Treasury, SEC, and other agencies to assess whether rules need to be modified and how to provide a "menu" of alternative assets and compliance conveniences for plan participants. This is not an isolated "policy boon," but rather the most structurally significant upgrade to the pension system since ERISA: it includes digital assets, which are still in a high-volatility early stage, into the optional category of the most core retirement accounts for the American middle class—401(k). It directly answers two questions: first, do crypto assets have the "qualification" to be held long-term by institutional funds? Second, who will endorse this qualification? The answer is straightforward—"national-level" framework and the U.S. pension system.

1.2 Analysis of the 401(k) System and Assessment of Funding Potential

To understand its scale, we need to shift our perspective from "news" to "asset pool." The U.S. retirement system operates on three parallel levels: Social Security, Individual Retirement Accounts (IRA), and employer-led defined contribution (DC) plans, with 401(k) being the absolute main character of DC. As of March 2025, the total assets of all employer-led DC plans were approximately $12.2 trillion, of which 401(k) accounts for about $8.7 trillion, covering nearly 60% of American households. The investment channels of 401(k) are primarily mutual funds, with about $5.3 trillion in mutual fund accounts, including $3.2 trillion in equity funds and $1.4 trillion in mixed funds; this indicates that even within the "pension" framework, the risk tolerance and pursuit of returns in the U.S. are no longer confined to the old world of "only buying bonds." Now, the executive order opens the door to adding "crypto assets" to the menu alongside stocks, bonds, REITs, and private equity.

To convert "possibility" into "scale," we can see how large this door is. Assuming only 1% of the 401(k) asset pool chooses to allocate to crypto assets, this theoretically means about $87 billion in medium to long-term net buying; if it's 2%, that's $174 billion; at 5%, it's about $435 billion. Comparing this to the visible reality: since the beginning of this year, the net inflow into Ethereum spot ETFs has accumulated to about $6.7 billion, while in just two days after the executive order took effect, ETH ETFs saw an additional $680 million in net inflow.

Why did ETH's price respond significantly stronger than BTC this time? If we only look at the "news-price" comparison on the same day, we might misjudge the market as "eating the story." By combining on-chain and off-chain dimensions, we get a more complete picture. First is the "capacity" of funds: ETH has a lower price base and a broader ecological application (DeFi, stablecoin settlement, L2 settlement, RWA tokenization), making it more friendly to the story of "long-term funds—productization"; second is the "preparedness" of products: with Bitcoin ETFs already operational for over a year, Ethereum spot ETFs naturally inherit the funding and compliance framework, making the "shortest path" for the executive order's implementation "copying from IBIT to ETHA"; third is the trading structure: after the executive order was announced, CME ETH futures annualized premiums briefly exceeded 10%, significantly higher than BTC, with the term structure providing clearer hedging and leverage paths for funds; finally, the "dominance" of the narrative: over the past two months, BitMine has established itself as "the largest ETH treasury company" within 35 days through a rhythm of "disclosure—financing—position increase—re-disclosure," and has turned off-chain structured tools (Galaxy's OTC design + on-chain delivery + custody settlement) into a reusable template; Tom Lee's target price of "$15,000" spread this template from institutional circles to media and retail investors, combined with the verifiable data of $680 million in net inflow into ETFs over two days, turning the narrative into "self-evidence." This is not about "storytelling driving prices," but rather a closed loop of "structural design connecting funds—prices spontaneously validating—narratives being passively reinforced."

Of course, equating "national endorsement" directly with "risk-free appreciation" is dangerous. The coupling of technology and regulation in crypto assets is still in a "transitional zone": on-chain event risks (contract security, cross-chain bridges, oracle manipulation), macro policy uncertainties (anti-money laundering, stablecoin regulatory frameworks, tax definitions), and judicial risks (the boundaries and proof obligations of trustees being sued) could trigger "unexpected" repricing in a single event. The "low turnover" of pensions helps reduce volatility, but if product design does not address "redemption gates," "premium/discount management," and "liquidity survival during extreme market conditions," it could amplify shocks during stress tests. Therefore, true institutionalization is not just about "buying it in," but also about "managing it": insurance pools and payout terms, triggering conditions for catastrophic events, auditing and evidence collection processes, on-chain transparency and traceability—all these must align with the "operational risks" that pensions can afford.

Returning to the asset level, this policy's "structural benefits" for ETH are also reflected in both supply and demand. On the demand side, we have already seen: the "re-acceleration" of ETFs, the CME's term premiums, and the sample diffusion from treasury companies and endowment funds; on the supply side, staking locks up originally "active and tradable" ETH into "yield-bearing staked assets," while EIP-1559's burn mechanism has kept "net issuance" very low during active periods. A market characterized by "drip-fed long money demand + reduced/locked supply" will naturally produce the curve characteristics of a "slow variable bull market"—not sharp daily spikes, but rather quarterly elevations and converging pullbacks. This also explains why BTC only rose about 2% on the day of the executive order, while ETH quickly surged and recorded $680 million in net inflow into ETFs over two days: the market is pricing "institutionalizable growth" more into assets that have multi-purpose settlement layers and characteristics that can be embedded in financial products.

Finally, translating "scale" into "path." In the short term, the first to reflect the policy will still be the secondary market ETFs and off-chain structured products (with easy reconciliation, actionable risk control, and insurable custody); in the medium term, some target risk funds/balanced funds may attempt to embed "crypto factors" in small proportions; in the long term, if the Department of Labor and SEC provide clearer guidelines on QDIAs, true "passive" crypto allocations will appear in the "default investments" of 401(k). This path does not require "mass enthusiasm"; it requires "pension-grade engineering" that is compliant, verifiable in risk control, insurable in custody, and transparent in disclosure. Once these links are established, 401(k) will turn "possibility" into "net buying"; and when net buying steadily flows into a network asset with gradually shrinking supply elasticity at a low frequency of 0.5 times/month over several years, a "new equilibrium" of price and volatility will emerge—this will not just be a "market event," but an upgrade of an asset class.

2. Institutional Confidence Endorsement: The Crypto Layout of University Endowment Funds

Similar to pensions, university endowment funds, which possess "perpetual capital" attributes, are pushing crypto assets from the margins of experimentation to the forefront of institutional allocation. Their asset-liability goals are intergenerational—under the constraint of adhering to an annual spending rate of about 4%-5% and maintaining purchasing power against long-term inflation, they seek to achieve "inflation + α" in long-term real returns through multi-asset portfolios. These funds share common characteristics: long duration, low turnover, and extreme sensitivity to compliance and fiduciary responsibilities: any new asset must pass three hurdles to enter the investment committee's "core menu"—legality and custodial feasibility, verifiability of valuation and auditing, and the synergy and diversification value with existing assets in the cycle. Because of this, the recent disclosures and public communications from several leading U.S. universities between 2024 and 2025 revealing exposure to Bitcoin (and by extension, Ethereum) carry significant weight: this is not about chasing short-term trends, but a vote from long-term funds on "whether it is worth including in the strategic asset pool."

From a timeline perspective, these institutions generally follow a similar path: around 2018, they established indirect exposure through crypto-themed venture capital funds for "research—small pilot" projects; around 2020, they attempted small-scale direct holdings through exchanges or off-chain channels to form "operational experience"; since 2024, with the maturation of spot ETFs and custodial auditing systems, they have begun to include fairly valued, intraday redeemable, and liquid products in their disclosure forms. Harvard University is currently the most symbolic example: the Harvard Management Company (HMC), managing about $50 billion, disclosed in its latest 13-F filing that it holds approximately 1.9 million shares of BlackRock's iShares Bitcoin Trust (IBIT), valued at about $116 million at the time, ranking among the top five publicly disclosed holdings, alongside Microsoft, Amazon, Booking Holdings, and Meta, even exceeding its holdings in Alphabet. Placing Bitcoin ETFs in the "competing products" lineup itself represents a transfer of pricing power—in Harvard's asset view, it is treated as a value that can be appraised, rebalanced, and can form a "dual anchor" against inflation and growth alongside gold and growth stocks. A more detailed signal is that Harvard simultaneously increased its allocation to gold ETFs (public reports indicate about 333,000 shares of SPDR Gold Trust, approximately $101 million), indicating that its portfolio strategy is not about "abandoning the old for the new," but rather balancing geopolitical friction and dollar liquidity's cyclical fluctuations through the parallel of "commodity anchor + digital anchor": when gold strengthens "crisis hedging," Bitcoin enhances "liquidity easing and institutionalization process" β, the correlation between the two will alternate in different macro phases to reduce tail risk in the portfolio. The first U.S. university to "speak out" was Emory University. On October 25, 2024, Emory publicly disclosed holding nearly 2.7 million shares of Grayscale's Bitcoin Mini Trust (GBTC), valued at about $15.1 million at the time; as Bitcoin prices rose in the following year, the nominal value of this position approached $30 million.

The institutionalization of crypto assets does not only come from established institutions but also from new types of organizations redefining the narrative. The University of Austin (UATX) announced in February 2025 the establishment of a Bitcoin-specific fund exceeding $5 million, included in its endowment fund management, with a clear holding period of at least five years. Stanford's case showcases the cutting-edge momentum of "on-campus investment culture." Although the university's own endowment fund has not disclosed holdings in crypto assets, the student-operated Blyth Fund decided in March 2024 to invest about 7% of its portfolio in IBIT, when Bitcoin was priced around $45,000. Blyth is not part of the formal endowment fund but is a portion of the school's discretionary fund pool, with assets only in the hundreds of thousands, yet it reflects the future managers' risk awareness and tool capability—these students embrace new assets through ETFs, a "pension-grade" tool, within a real investment framework, and this methodology will naturally migrate when they enter large institutions in the future. As for traditional heavyweight institutions like Yale, MIT, and Michigan, their style is more "steady and discreet."

If we place these scattered actions on a chart, we can identify several clear logical threads. First, path dependence: almost all universities tend to enter through ETFs/trusts to avoid direct private key custody and operational risks; second, scale and rhythm: starting with small amounts to verify processes and risk control, then discussing whether to elevate to "strategic allocation" levels based on volatility, correlation, and drawdown performance; third, portfolio roles: Bitcoin more often assumes the role of "digital gold," serving as a macro hedge and liquidity β carrier; Ethereum, on the other hand, is gaining increasing attention in narratives such as "financial markets on-chain," "on-chain settlement layer," and "RWA tokenization infrastructure," especially after the opening of the spot ETF channel and the 401(k) menu, its capacity from the institutional perspective is gradually approaching that of Bitcoin. It is precisely within this combination logic that we see the net inflow of ETH reaching $680 million over two days after the executive order was announced, and the CME ETH futures premium exceeding that of BTC, reflecting structural differences: when "long money" assesses which asset is more like "an asset that can be embedded in the financial product system," ETH's multi-purpose attributes and yield generation (staking rewards, MEV distribution, etc.) give it stronger marginal elasticity.

It is also noteworthy that university endowment funds and pensions represent the same "long money culture." The former embodies the intergenerational mission of the academic community, while the latter represents the retirement security of the middle class in society. Therefore, simply interpreting the entry of university endowment funds as "chasing the rise" is a misreading. They are more like experimental fields for "incorporating crypto assets into long-term balance sheets": using the most quantifiable ETF entry points, employing the strictest fiduciary processes for stress testing, and placing crypto assets within the coordinate system of "gold—growth stocks—high-quality bonds"; if drawdowns are bearable, correlations can be diversified during crises, and cash flows (for ETH, this means staking rewards) can be measured, then the weight could potentially shift from "basis points" to "percentage points." Once this migration occurs repeatedly in more schools and more quarters of disclosures, it will no longer be "news," but will become "common knowledge." When this common knowledge meets the institutional "drip irrigation" of 401(k), the "strategic hoarding pool" at the market bottom will take shape—quiet, yet powerful.

3. Narrative-Driven and the Transfer of ETH Pricing Power

If the transfer of Ethereum's pricing power in this round is the "invisible hand," then the back of the hand is a series of real monetary transactions, while the palm is the carefully orchestrated rhythm of information. The most evident distinction lies in the parallel and divergence of two capital paths: on one end is the OG logic represented by SharpLink—low cost, long cycle, on-chain fundamentals, and information closed-loop, trading time for space; on the other end is the Wall Street approach represented by BitMine—structured financing, rhythmic disclosures, media positioning, and price resonance, amplifying time through structure. Both are "buying ETH," but their methodologies point to two completely different pricing systems: the former believes prices will revert to value, while the latter actively carves value narratives into prices.

SharpLink's story begins with holding costs. It is backed by shareholders covering the infrastructure and financialization chain, including Consensys (with Lubin as board chairman), Pantera, Arrington, Primitive, Galaxy, GSR, Ondo, etc., passively ensuring the closed-loop capability of "buy—manage—use—custody—derivatives." Its early positions largely came from internal transfers within team wallets rather than the public market, with small unit sizes and long distribution cycles, emphasizing safety, liquidity, and auditing cooperation, with a comprehensive cost range of $1,500-$1,800, some even lower than $1,000. This "hoarding mentality" brings two predictable outcomes: first, when the price returns to around $4,000, the historical chips will naturally exert selling pressure, which is almost institutional; second, information disclosure tends to be "wait for earnings reports," with the S-ASR submitted on June 12, 2025, allowing for stock sales at any time, further reinforcing the "slow is steady" committee style. When we apply this path to the question of "who defines ETH's price," the answer is: the on-chain native community and time.

BitMine, on the other hand, smashed another answer onto the table in just 35 days. The timeline is as clear as a script: from July 1-7, PIPE financing of $250 million landed, disclosing the first batch of about 150,000 ETH entering the vault; from July 8-14, an additional 266,000 ETH was added, bringing total holdings to over 560,000; from July 15-21, another 272,000 ETH was added, totaling 833,000 ETH. It did not wait for quarterly reports but used "interspersed" official website updates, media, and IR letters to slice the rhythm weekly, precisely releasing strong signals of "we are continuously buying"; at the same time, Galaxy Digital provided "OTC structured design + on-chain delivery + custody settlement" tools to ensure efficient absorption without significantly raising slippage; more crucially, the disclosed average purchase price was about $3,491, avoiding the peak of the phase while hitting the sensitive threshold of a new upward channel.

This approach is effective because it accurately grasps the mechanism of narrative generation: first, the timing rhythm—breaking information into high-frequency fragments, allowing the market to have "no gaps" in continuity, reducing narrative entropy; second, the narrative container—packaging ETH from "technical platform coin" into "priceable, tradable, and cashable" financial assets, inventing a set of relevant metric language, such as ETH-per-share, integrating on-chain staking yields, burn rates, and spot ETF net inflows into a model that can be "communicated to sellers, buyers, and the board"; third, measurable validation points—using specific numbers to solidify expectations: average purchase price of $3,491, 833,000 ETH in three weeks, stock price 9 times, CME futures annualized premium >10%, and "net inflow of $680 million into ETH ETFs in the two days after the executive order," serving as "anchors" that media and institutional research can reference; fourth, channel positioning—linking IR letters, mainstream financial media, and social media short videos, allowing the narrative to be effective on both institutional (which needs models) and retail (which needs stories) ends. Thus, the narrative chain is compressed into four steps: rhythmic release → media amplification → investor FOMO → price feedback to narrative. When the price confirms "we are indeed buying, and when we buy, it rises," a new pricing power will naturally emerge.

The role of individuals in this system is amplified to "leverage on leverage." Tom Lee's value lies not in "predictive accuracy," but in "narrative standardization." His Bitcoin Misery Index (BMI), on-chain activity, volatility, drawdown depth, ETF subscriptions and redemptions, and M2 environment are polished into three facets: an "emotional dashboard" for retail, a "structural indicator card" for institutions, and "easy-to-understand headlines" for media. He rarely allows for "empty windows" in front of the camera: at the bottom, he says "extreme pain in sentiment, window for long-term holders," on the way up he says "structural bull market unfolding," and during pullbacks he says "on-chain structure is repairing." The important thing is not how accurate the conclusions are, but the frequency, early positioning, and clarity of the message. When BitMine's three-week progress bar is continuously "pinned" in the media, Tom Lee also articulates a target price of ETH at $15,000 in a podcast, with 180,000 plays providing retail investors with "psychological permission to act," while the institutional research department gains "external endorsement that can be written into memos." Following this, the structural change of CME ETH futures premium exceeding BTC appears, providing funds with a tool to amplify through basis strategies; subsequently, the two-day $680 million net inflow into spot ETFs digitizes the "buying power." This chain of "people—events—prices—volumes" allows the leap of "ETH from technical platform coin to financial asset" to no longer be just an internal wish, but a perceivable, measurable, and repeatable fact in the external world.

Ultimately, pricing power is not about "who shouts louder," but about "who can align prices faster and more sustainably with a widely accepted narrative and metrics." The deepest structural change in this upward movement is not about who is "bullish" on ETH, but rather who "can explain, can bear, can fulfill" ETH—the narrative leaders are becoming the writers of prices.

4. Conclusion and Investment Insights

In summary, the reason this round of increase presents "Ethereum being more sensitive and cleaner in its movements" fundamentally lies in the rearrangement of funding structures: under the dual-track reception of ETFs and derivatives, incremental buying is more likely to prioritize gathering in the most liquid and infrastructure-strong assets. In the two days following the executive order's announcement, ETH spot ETFs recorded approximately $680 million in net inflow, combined with approximately $6.7 billion in net inflow accumulated earlier this year, indicating that the funding pipeline of "pensions—brokerage windows—ETFs—secondary markets" has become repeatable.

It is important to note that institutional allocations not only pursue β but also manage the maximum drawdown and redemption liquidity constraints of the portfolio. In terms of "capacity," the depth of ETH's spot and derivatives order books is second only to BTC, and its ecological applications allow for the overlap of "non-financial demand" and "financial demand," making it the friendliest "bridge width" for passive funds. This also explains why, despite the announcement of favorable policies, BTC only rose about 2% within 24 hours, while ETH's price and trading volume expanded simultaneously, with both ETF and futures funding providing validation. In contrast, the "follow-up—fall behind—then differentiate" pattern of altcoins is not surprising but a necessity of market structure.

On a macro level, this structure is supported by the "weather for funds." In July, the U.S. non-farm payroll data was weak, and the unemployment rate rose slightly, coupled with high-level regulatory hints of three interest rate cuts within the year, with CME's "Fed Watch" indicating an approximately 88.4% probability of a 25 basis point cut in September. The downward expectation of nominal interest rates raised the pricing ceiling for risk assets and improved the trade-off results for "long money" regarding medium to long-term returns/volatility. Interest rate variables transmit to the crypto market through two paths: first, the reduction of discount rates directly elevates the valuations of assets with cash flow imagination, with ETH benefiting more significantly under the framework of "fees—burn—staking yields"; second, the "dollar liquidity—asset reallocation" link makes U.S. stocks, gold, and BTC/ETH the first-order recipients, with Ethereum occupying the central narrative of pricing due to its "financial infrastructure" attributes. This round of upward movement for ETH is not merely a trading signal but a repricing of an asset class. It is opened by the "compliance pipeline" of pension system reforms, with funds being funneled into the secondary market through ETFs, futures, and off-chain structures, while treasury companies, university endowments, and long money accounts lower turnover rates and strengthen the market bottom, further standardized and disseminated by media and research narratives as "verifiable facts." Only by understanding this logic can we grasp the core dividends of ETH's long-term value reassessment as the "trading-type uptrend" gradually transitions into a "allocation-type elevation."