As the world shifts towards easing, ETH may have taken the "best offensive position"

Author: Trend Research

Original Title: Under Global Easing Expectations, ETH Has Entered the Value "Strike Zone"

Since the market crash on October 11, the entire crypto market has been lackluster, with market makers and investors suffering heavy losses. The recovery of capital and sentiment will take time.

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

This is because the trend of mainstream crypto assets merging with traditional finance into a new ecosystem has not changed; on the contrary, during market downturns, it quickly accumulates its moat.

1. Strengthening Wall Street Consensus

On December 3, Paul Atkins, Chairman of the US SEC, stated in an exclusive interview with FOX at the New York Stock Exchange: "Within the next few years, the entire US financial market may migrate on-chain."

Atkins stated:

1. The core advantage of tokenization is that if assets exist on the blockchain, the ownership structure and asset attributes will be highly transparent. Currently, listed companies often do not know exactly who their shareholders are, where they are, or where the shares are located.

2. Tokenization is also expected to achieve "T+0" settlement, replacing the current "T+1" trading settlement cycle. In principle, on-chain Delivery Versus Payment (DVP) / Receive Versus Payment (RVP) mechanisms can reduce market risk and improve transparency, while the time lag between clearing, settlement, and fund delivery is currently one of the sources of systemic risk.

3. He believes tokenization is an inevitable trend in financial services, and mainstream banks and brokers are already moving in this direction. It may not even take 10 years for the whole world... it may become a reality in just a few years. We are actively embracing new technologies to ensure the US maintains a leading position in areas such as cryptocurrency.

In fact, Wall Street and Washington have already built a deep capital network into crypto, forming a new narrative chain: US political and economic elites → US Treasuries → Stablecoins / Crypto Treasury Companies → Ethereum + RWA + L2

This diagram shows the Trump family, traditional bond market makers, the Treasury Department, tech companies, and crypto companies intricately connected, with the green elliptical lines forming the main trunk:

(1) Stable Coin (USDT, USDC, USD assets behind WLD, etc.)

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

(2) US Treasuries (US government bonds)

Issued and managed by the Treasury / Bessent side

Used by Palantir, Druckenmiller, Tiger Cubs, etc. as low-risk interest rate base positions

Also the yield assets pursued by stablecoins / treasury companies.

(3) RWA

From US Treasuries, mortgages, accounts receivable to housing finance

Tokenized through Ethereum L1 / L2 protocols.

(4) ETH & ETH L2 Equity

Ethereum is the main chain for RWA, stablecoins, DeFi, and AI-DeFi

L2 equity / tokens represent rights to future trading volume and transaction fee cash flows.

This chain expresses:

US dollar credit → US Treasuries → Stablecoin reserves → Various crypto treasuries / RWA protocols → Ultimately settled on ETH / L2.

From the TVL of RWA, compared to other public chains that declined after October 11, ETH is the only public chain that quickly recovered and rose, with a current TVL of 12.4 billions, accounting for 64.5% of the total crypto market.

2. Ethereum's Exploration of Value Capture

Recently, the Ethereum Fusaka upgrade did not cause much stir in the market, but from the perspective of network structure and economic model evolution, it is a "milestone event." Fusaka is not just about scaling through PeerDAS and other EIPs, but attempts to solve the problem of insufficient value capture by the L1 mainnet since the development of L2.

Through EIP-7918, ETH introduces the blob base fee as 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 about 1/16 of the L1 base fee; this means that rollups can no longer occupy blob bandwidth at almost zero cost for a long time, and the corresponding fees will be burned and returned to ETH holders.

There have been three Ethereum upgrades related to "burning":

(1) London (single dimension): Only burns the execution layer, ETH begins to experience structural burning due to L1 usage

(2) Dencun (dual dimension + independent blob market): Burns both the execution layer and blobs, L2 data written into blobs also burns ETH, but when demand is low, the blob portion is almost zero.

(3) Fusaka (dual dimension + blob linked to L1): To use L2 (blob), you must pay and burn at least a fixed proportion of the L1 base fee, so L2 activity is more stably mapped to ETH burning.

Currently, blob fees in the 1-hour period at 23:00 on December 11 have reached 569.63 billions times the pre-Fusaka upgrade level, with 1,527 ETH burned in one day. Blob fees have become the highest contributor to burning, accounting for as much as 98%. As ETH L2 becomes more active, this upgrade is expected to return ETH to deflation.

3. Ethereum's Technicals Strengthen

During the October 11 decline, ETH futures leveraged positions were fully cleared, eventually hitting spot leveraged positions. At the same time, many with insufficient faith in ETH, including many ancient OGs, reduced their positions and fled. According to Coinbase data, speculative leverage in the crypto space has dropped to a historical low of 4%.

In the past, a significant portion of ETH shorts came from the traditional Long BTC/Short ETH pair trade, which generally performed very well in past bear markets, but this time something unexpected happened. The ETH/BTC ratio has remained sideways and resilient since November.

ETH's current exchange balance is 13 million, about 10% of the total supply, at a historical low. As the Long BTC / Short ETH pair has failed since November, in times of extreme panic, there may gradually emerge a "short squeeze" opportunity.

As we approach 2025–2026, both China and the US have released friendly signals regarding future monetary and fiscal policies:

The US will actively cut taxes, lower interest rates, and relax crypto regulation in the future, while China will appropriately ease and maintain financial stability (suppressing volatility).

Under the expectation of relative easing in both China and the US, in a scenario where asset downside volatility is suppressed, and during times of extreme panic when capital and sentiment have not fully recovered, ETH is still in a good "strike zone" for buying.