Original article by Daniel Yu, Head of Asset Management.

Recent ETH market performance: driven by price surge and on-chain activity

Ethereum (ETH) has maintained strong momentum this year, recently entering an accelerated upward phase. In early August, the price of ETH briefly surpassed $4,300, reaching a new high since the end of 2021, with an increase of over 20% over the past seven days. The rapid rise in mid-to-late July was even more significant, with a nearly 44% increase in two weeks, fully demonstrating strong market buying.

This surge was accompanied by a significant increase in on-chain activity. ETH's daily trading volume reached a nearly one-year high, and the network's staked supply is approaching 30% of the total supply, with more holders choosing to stake their ETH for returns. In July 2025, the Ethereum network processed approximately 46.67 million transactions, and the number of active addresses reached 683,500, both breaking all-time records. After US regulators clarified that staked derivatives are not securities, investor confidence increased, and the amount of ETH on exchanges fell to 15.35 million, the lowest level since 2016, indicating that more tokens are being locked up for the long term or invested in the on-chain ecosystem.

The derivatives market is also sending bullish signals. ETH options open interest reached a record high of $13.75 billion, with call options accounting for approximately 67%, indicating a clear market bias toward further price increases. CME ETH open interest has increased significantly, reflecting a significant influx of institutional funds. The distribution of implied volatility in options is also concentrated at high strike prices, with open interest for December-expiring $6,000 call options leading the way, reflecting strong medium-term market optimism. Overall, ETH prices, on-chain data, and the structure of derivatives all point to a consensus: market confidence in Ethereum's future remains high.

Institutional "Coin Hoarding War": ETH Treasury Stock Model Becomes Market Focus

As ETH prices climb, institutional investor interest continues to grow. The most notable phenomenon is the emergence of "ETH treasury shares." Two previously unrelated publicly traded US companies—SharpLink Gaming (NASDAQ: SBET) and Bitmine Immersion Technologies (AMEX: BMNR)—have recently invested heavily in ETH, transforming themselves into ETH holders.

As of now, the combined holdings of SBET and BMNR surpass those of the Ethereum Foundation. SBET raised over $400 million through a share issuance (ATM mechanism) and holds approximately 280,000 ETH (with a market capitalization exceeding $1 billion). BMNR, chaired by veteran Wall Street strategist Tom Lee, has acquired approximately 300,000 ETH and has stated its goal of ultimately holding 5% of the global ETH supply. This positioning has been seen as an "ETH version of a central bank," mirroring MicroStrategy's strategy of hoarding Bitcoin.

The logic behind these two companies' hoarding is to treat ETH as a core reserve asset rather than a purely speculative target. By financing and staking ETH through capital markets, they not only lock in potential long-term appreciation but also earn staking returns, boosting their balance sheets. SBET even discloses its "ETH per share" metric, positioning itself as a bridge between the traditional stock market and decentralized finance.

This treasury stock phenomenon has directly altered the supply and demand landscape of ETH. On the one hand, continued large-scale purchases have tightened market liquidity, providing support for ETH prices. On the other hand, the competition among businesses to hoard ETH has sparked industry discussion. Ethereum co-founder Joseph Lubin acknowledged this, calling it a "fierce competition" and jokingly saying, "The game is on." This competition is seen as a key catalyst for the advancement of decentralized finance, signifying that private enterprises will play a more active role in the adoption and value discovery of ETH.

From an investment tool perspective, treasury stocks offer greater flexibility than traditional ETFs. Standard Chartered Bank notes that these companies already rival ETFs in terms of holdings, but offer advantages in valuation flexibility, capital operations, and the use of derivatives. Recently, the share prices of SBET and BMNR have seen single-day increases exceeding 10%, demonstrating the market's enthusiasm. It is foreseeable that this trend will have a profound impact on the long-term supply and demand of ETH and institutional participation.

Volatility Premium Unleashing Opportunities: ETH vs. BTC Structured Product Window

Compared to BTC, ETH has long maintained higher price volatility. In May of this year, ETH options' implied volatility was twice that of BTC, the largest gap in five years. That same month, BTC's short-term volatility fell below 35% annualized, while ETH's remained elevated, causing the 30-day volatility gap between the two to reach its highest level since mid-2022. This suggests that the market's expectations for ETH's future price volatility are significantly higher than those for BTC.

High volatility creates more favorable return conditions for structured products. For example, given the elevated implied volatility of ETH, selling put options can generate higher premiums than trading BTC. Dual-currency products often offer higher annualized returns than comparable BTC-linked products, precisely due to the additional returns provided by the ETH volatility premium. This provides investors who are bullish on ETH long-term and willing to capitalize on short-term volatility an opportunity to convert high volatility into stable returns.

Of course, high volatility also requires more cautious risk management. If volatility declines in the future and the gap with BTC narrows, then currently issued high-coupon products will lock in relatively substantial returns. Conversely, in a unilateral market, attention should be paid to the risk buffers and trigger conditions of structured products. Overall, the volatility difference between ETH and BTC provides investors with dual strategic opportunities: "collecting coupons" and "expecting flexibility."

ETF Funds Influx and Corporate Holdings Increase: ETH Moves Toward Deep Institutionalization

With the expansion of its market capitalization and application ecosystem, ETH is entering a more institutional phase. So far this year, US spot ETH ETFs have attracted over $6.7 billion in net inflows, with nearly $2.4 billion pouring in during the six trading days of late July alone, far exceeding the $827 million inflows of BTC ETFs during the same period. This reversal in capital flows reflects a shift in institutional investment preferences: ETH is becoming a new mainstream investment target.

Institutional participation isn't limited to ETFs. In the past month, several US public companies have collectively purchased over $1.5 billion in ETH for their reserves. Treasury stocks like SBET and BMNR, along with funds like Grayscale Trust, now account for a significant portion of the circulating supply, reducing the amount of ETH available for trading.

The institutionalization of the derivatives market is also increasing. CME's ETH futures open interest reached a new high, with an annualized premium exceeding 10%, attracting arbitrage funds from BTC to ETH. Asset management giant ARK Invest has also significantly increased its holdings in ETH-related assets, purchasing 4.4 million shares of BMNR through its ETF in July (at a cost of approximately $116 million), while simultaneously reducing its holdings in Coinbase and other institutions, further shifting its allocation towards ETH.

A favorable regulatory environment is also boosting institutionalization. The SEC recently issued a positive signal, clarifying that some staking-yield tokens do not constitute securities. The market anticipates that future spot ETH ETFs will introduce staking dividends, allowing institutional investors to benefit from both price appreciation and staking returns.

Due to the superposition of multiple factors, many analysis institutions predict that ETH's status in institutional assets will continue to improve, and may even challenge BTC's dominance in some areas.

Matrixport Structured Product Strategy: Four Solutions to Match Different Market Conditions

Against the backdrop of increasing ETH volatility and continued inflow of institutional funds, Matrixport provides a diverse portfolio of structured products for investors with different risk appetites:

Conclusion

Overall, ETH currently exhibits a favorable situation, characterized by a strong price, active on-chain activity, and increasing institutional investment. Amid this optimism, investors must seize rising opportunities while also prioritizing risk management. Structured products offer a wide range of strategic tools, enabling clients with diverse risk appetites and needs to participate in the ETH market in a customized manner. They can achieve excess returns through discount accumulation and coupon enhancement products, while also leveraging snowball and dual-currency strategies to maintain stable profits or arbitrage opportunities amidst market volatility. For Matrixport clients interested in ETH investment, strategically utilizing these products to build a portfolio strategy can help them achieve both offensive and defensive strategies and achieve steady growth in a bull market.

Of course, any structured strategy should be based on a clear assessment of your financial situation and risk tolerance, and executed with the advice of a professional team. Matrixport is committed to being your long-term partner in exploring ETH investment, helping you navigate volatility and seize opportunities in trends, enabling digital assets to become more than just holdings, but also a positive engine for wealth growth.