Ethereum (ETH) recovered 56% over the past month, reaching $2,565.95 as of writing on May 15, 2025. This has slowed Bitcoin and new Layer 1 competitors, pointing to changes in institutional strategies, shifts in new blockchain technology use cases, and widespread market movements from single asset dominas.
The ETH recovery was traded around April 24th for less than $1,700, accelerated between May 8th and May 13th, easily passing $2,700 before stabilizing.
Source: CoinMarketCap
Structural development will promote the revival of Ethereum
While sentiment in the general crypto market has improved, the rise in Ethereum comes from a significant structural development, as highlighted in a client note from research firm Bernstein. These factors include increased Stablecoin Payments activity, expansion of the Layer 2 network, and significant changes in hedge fund trading behavior with regard to ETH.
Ethereum boosts Stablecoin and Tokenization Networks
According to Bernstein, Ethereum’s capabilities within the Stablecoin and Tokenization networks are growing. The Ethereum Network currently supports more than half of its Stablecoin supply. This fundamental role has gained importance as traditional companies increasingly adopt digital payments.
With the new focus of Stripe’s Stablecoin Platform Bridge and Meta’s Stablecoin project, the $1.1 billion acquisition has attracted attention on Ethereum’s core infrastructure. With Stablecoin payments and tokenized securities looking to broadly use, Ethereum is re-emerging as the central platform for these transactions.
Related: Ethereum’s multi-role strategy compared to Windows and the Internet domination
Advantages in real-world asset tokenization boost Ethereum
This growing focus coincides with Ethereum’s increasing advantage in the real world asset (RWA) tokenization market. RWA.xyz’s data has a market size of over $22 billion, with major asset managers such as BlackRock and Franklin Templeton deploying assets in chains.
As Ethereum continues to be a favorable platform for these tokenized financial products, its importance in the adoption of institutional blockchains is increasing.
Layer 2 ecosystem and institutional use cases expand ETH values
Institutional adoption is also seen through Ethereum’s Layer 2 ecosystem. Networks like Base, launched by Coinbase, generated around $84 million in revenue last year. These Layer 2 work with Ethereum and require ETH for gas and subsidence.
Related: ETH prices remain strong above $2.5,000 despite the wild exchange flow and a huge $1.2 billion withdrawal
Bernstein suggests that recruiting companies like Robinhood, which recently acquired Ethereum Layer 2 operator Wonderfi, can expand tokenized products through retail intermediary platforms. This activity supports the value of Ethereum through increased usage and transaction volumes.
Shift hedge fund strategy prefers Ethereum
Finally, changes in trading patterns have contributed to Ethereum’s recent price rise. For the past 18 months, hedge funds have often used ETH as part of their delta neutrality strategies, moving forward longer with BTC or SOL while reducing ETH. This short position is reversed as the market narrative shifts to blockchain utilities and moves away from the use of valuable storage.
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