Wall Street Rushes Into Ethereum, Why Is ETH Price Still Weak?

Original Author: Alex O'Donnell

Original Translation: Saoirse, Foresight News

The Ethereum network is gaining recognition from Wall Street, but investors remain not entirely bullish on ETH.

In recent months, the pace of institutional adoption of Ethereum has accelerated significantly. Since May, several financial institutions including JPMorgan, Robinhood, and Morgan Stanley have successively launched various Ethereum-related products and services. In July, several former members of the Ethereum Foundation established the non-profit independent institution Ethereum Institutional, aiming to accelerate the practical implementation of Ethereum by major organizations.

Meanwhile, Ethereum co-founder Vitalik Buterin released a major network upgrade roadmap named "Lean Ethereum," which aims to enhance Ethereum's privacy capabilities and resistance to quantum attacks.

However, the market has not responded positively. At the time of writing, ETH is trading slightly above $1,900, a decline of over 60% from its all-time high of approximately $4,950 in August 2025. Analysts generally believe it is difficult for ETH to reclaim its previous highs in the short term. On July 1, Citigroup lowered its 12-month price target for Ethereum from $3,175 to $2,240, citing weakening investor demand and continued net outflows from Ethereum ETFs.

The research team at Galaxy Digital stated that the reason for the disconnect between price action and fundamentals is clear: a growing number of investors are struggling to understand the value growth logic of ETH.

Wall Street's Expanding Footprint

Nowadays, institutional application of blockchain is no longer limited to pilot experiments, and Ethereum is one of the biggest beneficiaries of this trend.

In May, JPMorgan Asset Management launched its second tokenized money market fund, JLTXX, on the Ethereum public chain. In July, online brokerage Robinhood launched Robinhood Chain, an Ethereum Layer 2 network built specifically for financial services and tokenized assets.

Morgan Stanley is also pushing ETH further into mainstream securities accounts. Qualified E*TRADE users can now trade and hold Ethereum, Bitcoin, and SOL.

The reason institutions are increasingly doubling down on Ethereum is its mature developer ecosystem and its large-scale, decentralized validator network. It is highly likely that institutional deployment will continue to accelerate.

In a statement on July 1, ConsenSys CEO Joe Lubin mentioned that the vast majority of stablecoin issuances, tokenized assets, decentralized finance, and various on-chain financial infrastructure will prioritize Ethereum.

Ambitious Upgrade Plans

Beyond this, Ethereum is on the verge of comprehensive technological innovation, an upgrade that will further enhance its appeal to various institutions.

In July, Buterin publicly disclosed the "Lean Ethereum" development roadmap, with the entire restructuring cycle expected to take three to four years. He stated that the scale of this upgrade is comparable to Ethereum's network-wide transition to a proof-of-stake consensus mechanism in 2022.

The upgrade aims to reduce the cost of using Ethereum, enhance network security, and optimize user privacy protection – a feature highly valued by institutional traders. If the upgrade is successfully implemented, Ethereum could become one of the first blockchains with reliable resistance to quantum attacks.

In July, Ethereum Foundation researcher Justin Drake stated that robust security attributes would become a natural advantage in attracting global institutions to migrate to Ethereum.

Economic Fundamentals Full of Uncertainty

Despite a continuous stream of positive news, the price of ETH remains sluggish.

One root cause lies in Ethereum's scaling solutions. Ethereum heavily relies on Layer 2 blockchains to achieve lower-cost and more efficient transaction processing.

Theoretically, higher on-chain activity generates more fees, leading to increased market demand for ETH. However, data from L2Beat shows that since 2024, the vast majority of transactions in the Ethereum ecosystem have been handled by Layer 2 networks, which only periodically settle finality on the Ethereum mainnet.

Scaling solutions have significantly reduced transaction costs, helping Ethereum accommodate more traffic, but they have also severed the link between on-chain activity and ETH demand: a large volume of transactions has moved off the mainnet, resulting in less fee revenue for the Ethereum mainnet.

Researchers at 21Shares stated in January that such changes are beneficial for ordinary users but carry both pros and cons for ETH holders. Unless overall on-chain transaction volume surges enough to offset the shortfall from lower fees, reduced fees will decrease the amount of ETH burned.

Divergent Market Forecasts

Currently, Ethereum is likely to evolve into a core piece of financial infrastructure, but how much profit ETH holders will ultimately reap remains uncertain. Price predictions from various industry players vary widely.

Citigroup predicts ETH will be just above $2,000 in 12 months; Standard Chartered is much more optimistic, forecasting ETH to reach $4,000 by the end of 2026 and $40,000 by 2030.

BitMine Chairman Tom Lee is even more aggressive, suggesting ETH could ultimately reach a long-term price of $250,000, corresponding to a total market capitalization of approximately $30 trillion.

In summary, the probability of Ethereum becoming mainstream core financial infrastructure is increasing, but whether ordinary token holders can fully share in the benefits of the industry's growth remains highly uncertain.