Institutional Investors Shift Focus Towards Ethereum for Settlement Services, According to Bitwise's Assertion
Ethereum Shifts Focus to Institutional Stablecoin Flows
Ethereum, once predominantly associated with non-fungible tokens (NFTs) and decentralized finance (DeFi), is now increasingly being utilized as a heavyweight settlement system for institutional money. A new analysis from Bitwise Europe indicates that the network's base layer is experiencing a transformative shift, with institutional-grade stablecoin transactions outpacing retail activity.
The data reveals that Ethereum is morphing from a retail-centric network to a hub for institutional settlement, handling a majority of on-chain activity in the form of stablecoins. With over $127 billion in stablecoins circulating on the Ethereum blockchain, this trend suggests that institutions are increasingly utilizing the network for institutional treasury flows and on-chain dollar transactions.
The DeFi frenzy and NFT mania that once dominated Ethereum have mostly migrated to layer-2 solutions. NFT activity, which peaked sharply in the 2021-2022 cycle, has since subsided significantly, reflecting both market stabilization and a shift to layer-2 solutions, where most new NFT launches now occur.
Ethereum's mainnet is primarily dedicated to supporting core infrastructure functions such as ETH transfers, regulated tokenized assets, and foundational systems that enable layer-2 rollups and cross-chain bridging. Advancements such as Pectra (already live) and PeerDAS/Fusaka (coming soon) are part of this strategic shift towards institutional applications. These upgrades aim to augment validator incentives, governance, and scalability specifically for large-scale, institutional-grade use cases rather than retail transactions.
The growth in Ethereum's stablecoin transactions is a testament to its ascendancy as a preferred network for institutional digital finance. In April 2025, Ethereum's stablecoin volume reached an all-time high of $908 billion, driven primarily by institutional adoption and participation from major tech firms and financial entities.
Looking ahead, Ethereum's future scaling plans prioritize institutional needs by supporting layer-2 ecosystems and fostering an infrastructure that seamlessly integrates tokenized real-world assets and stablecoins. This strategic focus positions Ethereum as a vital settlement hub for institutional-grade finance, focusing on secure, high-capacity settlement systems tailored for large-scale institutional flows.
This evolution marks Ethereum as a pivotal settlement hub for institutional stablecoin and tokenized asset flows in the burgeoning digital financial ecosystem.
- The influx of institutional stablecoin transactions on Ethereum's network indicates a shift towards institutional finance, moving away from the previous focus on non-fungible tokens (NFTs) and decentralized finance (DeFi).
- With the majority of on-chain activity occurring in stablecoins, Ethereum is transforming into a hub for institutional settlement, rather than a retail-centric network.
- Advancements in Ethereum's technology, such as Pectra, PeerDAS, and Fusaka, are geared towards enhancing validator incentives, governance, and scalability for institutional-grade use cases.
- Ethereum's stablecoin volume reached an all-time high of $908 billion in April 2025, primarily driven by institutional adoption and participation from major tech firms and financial entities, positioning it as a pivotal settlement hub for institutional-grade finance.
