Under global easing expectations, ETH has entered the value "strike zone".

Author: Trend Research

Since the market crash in 1011, the entire cryptocurrency market has been sluggish, with market makers and investors suffering heavy losses. The recovery of funds and sentiment will take time.

However, what the cryptocurrency market lacks the least is volatility and opportunities, and we remain optimistic about the future.

The trend of the integration of crypto assets and traditional finance into new business models has not changed; instead, it has rapidly accumulated a moat during periods of market downturn.

1. Strengthening the Wall Street Consensus

On December 3, Paul Atkins, the chairman of the SEC, stated in an interview with FOX at the New York Stock Exchange that “the entire U.S. financial market may migrate to the blockchain in the coming years.”

Atkins said:

2. The core advantage of tokenization is that if an asset exists on the blockchain, the ownership structure and asset attributes will be highly transparent. However, publicly listed companies often do not know who the shareholders are, where they are located, or where the shares are.
3. Tokenization is also expected to achieve “T+0” settlement, replacing the current “T+1” trading settlement cycle. In principle, the on-chain delivery versus payment (DVP) / receipt versus payment (RVP) mechanism can reduce market risk and enhance transparency, while the time lag between clearing, settlement, and fund delivery is one of the sources of systemic risk.
4. It is believed that tokenization is an inevitable trend in financial services, and mainstream banks and brokerages are already advancing in the direction of tokenization. The entire world may not even take 10 years… perhaps it will become a reality in just a few years. We are actively embracing new technologies to ensure that the United States maintains a leading position in areas such as cryptocurrency.

In fact, Wall Street and Washington have already built a deep capital network in cryptocurrency, forming a new narrative chain: U.S. political and economic elites → U.S. Treasury bonds (government bonds) → Stablecoins/crypto vault companies → Ethereum + RWA + L2

From this image, we can see the intricate connections between the Trump family, traditional bond market makers, the Treasury, technology companies, and cryptocurrency companies, with the green oval connections forming the main framework:

** (1) Stablecoins (assets backed by USD such as USDT, USDC, WLD, etc.) **

The main reserve assets are short-term US Treasury bonds + bank deposits, held through brokers like Cantor.

(2) U.S. Treasury Bonds

Issued and managed by Treasury / Bessent side.

Palantir, Druckenmiller, Tiger Cubs, etc. are used to create low-risk interest rate bottom positions.

It is also a stablecoin / a revenue-generating asset pursued by treasury companies.

(3) RWA

From US Treasuries, mortgages, accounts receivable to housing finance

Tokenization completed through Ethereum L1 / L2 protocols.

(4)ETH & ETH L2 Rights

Ethereum is the main chain that connects RWA, stablecoins, DeFi, and AI-DeFi.

L2 equity/Token is the entitlement to future trading volume and fee cash flows.

This chain expresses:

USD credit → US Treasury bonds → Stablecoin reserves → Various crypto treasuries / RWA agreements → Ultimately settled on ETH / L2.

In terms of RWA's TVL, compared to other public chains that dropped on 1011, ETH is the only public chain that quickly recovered from the drop and increased. Currently, the TVL is 12.4 billion, accounting for 64.5% of the total cryptocurrency.

2. Ethereum Exploration of Value Capture

Recently, the Ethereum Fusaka upgrade did not create much of a stir in the market, but from the perspective of the evolution of network structure and economic models, it is a “milestone event.” Fusaka is not merely expanding capacity through EIPs like PeerDAS, but is attempting to address the issue of insufficient value capture of the L1 mainnet caused by the development of L2.

Through EIP-7918, ETH introduces blob base fee into a “dynamic floor price,” binding its lower limit to the L1 execution layer base fee, requiring blobs to pay DA fees at a unit price of at least approximately 1/16 of the L1 base fee; this means that Rollups can no longer occupy long-term unit price payments at nearly 0 cost.

There are three upgrades related to “burning” in Ethereum.

(1) London( Unidimensional): Only the execution layer burns, ETH begins to generate structural burning due to L1 usage.

(2) Dencun (Dual Dimension + Blob Market Independence): Burn Execution Layer + Blob, L2 data written into blob will also burn ETH, but during low demand, the blob portion is almost 0.

(3) Fusaka (Dual Dimension + blob bound to L1): To use L2 (blob), a fixed proportion of the L1 base fee must be paid and burned, with L2 activities being more stably mapped to ETH burn.

Currently, the blob fees for the one-hour period on December 11 have reached 569.63 billion times that of before the Fusaka upgrade, with 1,527 ETH burned in one day. The blob fees have become the highest contributor to the burning ratio, reaching 98%. As ETH L2 becomes more active, this upgrade is expected to bring ETH back to deflation.

3. Ethereum Technical Strength

In the drop of 1011, the futures leverage positions of ETH were fully liquidated, ultimately reaching the spot leverage positions. At the same time, many who lack faith in ETH led to numerous ancient OGs reducing their holdings and escaping. According to Coinbase data, the speculative leverage in the cryptocurrency circle has fallen to a historical low area of 4%.

A significant part of the recent ETH bearish market has come from the traditional Long BTC/Short ETH pairing, which has typically performed very well during past bear markets. However, this time there has been an unexpected turn. The ETH/BTC ratio has maintained a sideways resistance since November.

The current exchange supply of ETH is 13 million coins, approximately 10% of the total supply, which is at a historical low. As the Long BTC / Short ETH pair becomes ineffective starting in November, there may gradually be a “short squeeze” opportunity as the market is in extreme panic.

As we approach the interactions of 2025–2026, both China's and the United States' future monetary and fiscal policies have signaled a friendly message:

The United States will actively reduce taxes, lower interest rates, and ease cryptocurrency regulations in the future; China will moderately loosen its policies and maintain financial stability (suppress volatility).

Under the relatively loose expectations of China and the United States, in a scenario where downward volatility of assets is suppressed, and during extreme panic when funding and sentiment have not yet fully recovered, ETH remains in a relatively good buying “striking zone.”

(The above content is excerpted and reprinted with the authorization of our partner PANews ****, original link | Source: Cycle Trading __)

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Disclaimer: This article is for market information only. All content and opinions are for reference only and do not constitute investment advice, nor do they represent the views and positions of the blockchain platform. Investors should make their own decisions and trades, and the author and the blockchain platform will not bear any responsibility for any direct or indirect losses incurred by investors' trades.
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