Analysis: Ethereum Faces a "Narrative Vacuum Period," Institutional Capital and Privacy Models Emerge as Key Future Variables

Odaily According to industry insiders, Ethereum is currently in a "gap between narratives." Markets tend to price in uncertainty first when lacking a clear long-term value logic. Over the past few years, the dominant market narrative has been that scaling primarily occurs on Layer 2, while the mainnet maintains security, decentralization, and a lean architecture. This path successfully attracted capital and developer resources. However, current market focus is shifting towards zero-knowledge technology and privacy capabilities returning to the base layer, leading to a mismatch in expectations for some investors who built valuation models based on the old roadmap. Full on-chain transparency presents practical barriers for institutional capital, as large corporate treasuries or funds are unwilling to have their trading strategies tracked in real-time. If Ethereum aims to attract trillion-dollar scale institutional capital, protocol-level privacy capabilities will become a key competitive variable. Furthermore, the expansion of the options market around spot ETFs is also altering Ethereum's price formation mechanism, with the influence of covered call strategies and market maker hedging behavior continuously increasing. (Forbes)