Wall Street is moving into Ethereum-why hasn't ETH prices increased with it?

The Ethereum network has won favor on Wall Street, but investors have not yet fully recognized Ethereum (ETH)

In recent months, the pace of institutional adoption of Ethereum has accelerated significantly. Since May, financial institutions such as JPMorgan Chase, Robin Hood, and Morgan Stanley have launched Ethereum-related products and services. In July, some alumni of the Ethereum Foundation established an independent non-profit organization called the "Ethereum Institution" to accelerate the institution's adoption of Ethereum.

Meanwhile, Ethereum co-founder Vitalik Buterin unveiled a major network upgrade roadmap called "Lean Ethereum", which aims to strengthen privacy protection and anti-quantum computing capabilities.

However, the market does not seem to respond positively to this. As of this writing, ETH is trading at approximately $1900, down more than 60% from the all-time high of approximately $4950 in August 2025.

Analysts do not expect a recovery to record highs in the short term. On July 1, Citigroup lowered its 12-month forecast for ETH to $2240 from $3175, citing weakening investor demand and outflows from exchange-traded funds (ETFs).

According to Galaxy researchers, there is a simple explanation for this apparent disconnect: "Investors are increasingly confused about the logic of ETH value accumulation."

Wall Street's footprint expands

This year is becoming the year for institutional blockchain applications to move beyond the pilot phase, and Ethereum is one of the main beneficiaries.

In May, JPMorgan Asset Management launched JLTXX, its second tokenized money market fund on the public Ethereum network.

In July, online brokerage platform Robin Hood launched Robinhood Chain, a second-layer Ethereum network built for financial services and tokenized assets.

Meanwhile, Morgan Stanley has pushed ETH further into mainstream brokerage accounts. Eligible E*TRADE customers can now buy, sell and hold Ethereum, Bitcoin (BTC) and Solana (SOL).

This construction momentum is expected to accelerate as organizations tilt towards Ethereum's mature developer ecosystem and vast decentralized validator network.

CouncilSys CEO Joe Rubin said in a July 1 statement that Ethereum "has been the first choice for most stablecin activities, tokenized assets, DeFi and other on-chain financial infrastructure."

Ambitious upgrades

Meanwhile, Ethereum is preparing for a broad technology overhaul that could make the network more attractive to institutions.

In July, Butrin outlined his vision for the "Lean Ethereum" roadmap, a three to four-year reconstruction plan that he said would be comparable to the network's 2022 transition to proof-of-stake.

The plan aims to make Ethereum more cost-effective and secure while enhancing user privacy-an important consideration for institutional traders. If the upgrade goes according to plan, Ethereum could become one of the first blockchain networks to truly be resistant to quantum computing.

Justin Drake, a researcher at the Ethereum Foundation, said in July that it would be a "very natural security selling point that attracts global migration to Ethereum."

Uncertain economic models

Despite continued good news, ETH prices have remained sluggish.

Part of the problem lies in Ethereum's expansion strategy. The network relies heavily on second-layer blockchain for cheaper and more efficient transaction processing.

In theory, more Ethereum activity should generate more transaction fees and increase the demand for ETH. But since 2024, the second-layer network, which regularly settles on Ethereum, handles most transactions in the ecosystem.

This shift has significantly reduced transaction costs and helped Ethereum expand its capacity. At the same time, it also weakens the link between network activity and ETH demand, as more transactions move beyond the base layer, reducing fees incurred for Ethereum itself.

"This is good for users, but for ETH holders, the results are mixed; lower fees reduce the amount of ETH destroyed unless overall activity growth is enough to make up for the gap," 21Shares researchers said in January.

Divergent predictions

What this ultimately means for ETH prices remains to be seen.

Predictions vary widely.

Citi expects ETH to trade at around US$2000 in the next 12 months, while Standard Chartered Bank is more bullish, expecting to reach US$4000 by the end of 2026 and US$40000 by 2030.

At the same time, BitMine Chairman Tom Lee is more optimistic that ETH may eventually reach US$250,000, which means its market value is about US$30 trillion.

Currently, Ethereum is increasingly likely to become the core financial infrastructure. But how much ETH holders will benefit from it remains uncertain.