Ethereum is gaining traction among banks, asset managers and fintech companies. J.P. Morgan and BlackRock now offer tokenised liquidity products on the blockchain, while Robinhood has launched an Ethereum Layer 2 solution based on the Arbitrum stack.

For Pascal Hügli, Crypto Investment Manager at Zurich-based private bank Maerki Baumann, these projects are important signs of Ethereum's growing institutional acceptance. The network's economic metrics, however, paint a less convincing picture.

Revenues Have Fallen Sharply

One key measure is Ethereum's Real Economic Value, or REV. Put simply, it measures how much economic value the use of Ethereum generates for the protocol, validators and ultimately ETH holders.

REV has fallen sharply from the levels reached in 2023 and 2024. When interest in cryptocurrencies declines, trading, leverage and speculative activity tend to fall as well. This results in fewer transactions, less competition for blockspace and lower fee revenues.

This matters for Ether. Layer 1 fees are paid in ETH, while base and blob fees are burned and priority fees and maximal extractable value largely flow to validators. Sustained demand for blockspace can therefore reduce the net issuance of ETH.

Stablecoins Are the Biggest Business

The picture looks more encouraging when considering the broader economic activity generated by applications on Ethereum.

The network's so-called «Application GDP» has increased over time, although it remains highly cyclical. Stablecoins are by far the largest application segment. In the second quarter of 2026, Tether and Circle accounted for a significant share of the application revenues captured by the data.

They were followed by staking providers including Lido and Ether.fi, lending platforms such as Aave, Sky and Maple Finance, decentralised exchanges including Uniswap, and block-building activities.

$15 Billion in Real-World Assets

Another area is likely to be of particular interest to the traditional financial industry: the tokenisation of real-world assets.

These can include money-market funds, bonds, loans and equities. Unlike many conventional crypto applications, their use is more closely linked to savings, payments, capital markets and balance-sheet management and therefore less directly dependent on crypto prices.

Ethereum currently has a commanding position in this market. Almost $15 billion in real-world assets are represented on the network, equivalent to nearly half of the tracked on-chain RWA market, according to Maerki Baumann.

This could become an important source of more sustainable demand if traditional financial activities increasingly move onto public blockchains.

But there is a catch: more assets being tokenised does not necessarily mean higher revenues for Ethereum. What matters is how intensively those assets are actually used and transferred.

Ethereum's Layer 2 Dilemma

The rise of Layer 2 networks creates an even more fundamental challenge for ETH's investment case.

Ethereum has deliberately shifted a significant portion of transaction activity away from its main chain to Layer 2 networks to lower costs and improve scalability. These networks execute and bundle transactions before transmitting the relevant data to Ethereum Layer 1, for which they pay fees in ETH.

Technologically, the strategy is working. Economically, however, it presents a dilemma.

So far, growing activity on Layer 2 networks has translated only to a limited extent into higher Layer 1 revenues. Data capacity remains abundant and demand is still insufficient to create scarcity and substantially higher fees.

In an extreme scenario, Ethereum could therefore become a victim of its own success: the ecosystem could continue to grow and attract more applications while an increasing share of economic activity takes place away from Layer 1.

In other words, Ethereum could succeed as a technology platform without ETH capturing the same degree of economic value.

Ethereum Is Not Bitcoin

There is also a fundamental difference between Ether and Bitcoin. Bitcoin's investment case is primarily based on scarcity and its role as a digital store of value. ETH's value proposition is more complex, combining scarcity with staking returns, network usage and fees.

Since Ethereum switched from Proof of Work to Proof of Stake in September 2022, the ETH supply has increased by an average of only around 0.3 percent annually. According to the figures cited by Maerki Baumann, this is slower than the current supply growth of both Bitcoin and gold.

A further change to ETH's monetary policy is now being discussed. The EIP-8363 proposal, known as «Tapered Issuance Burn», would burn an increasing proportion of validator rewards as the staking ratio rises. The aim is not to introduce a hard supply cap but to reduce dilution for investors who do not stake their ETH.

The proposal remains controversial and is still at the draft stage. Lower staking yields could hurt smaller validators and have broader consequences for liquid staking, lending markets and other decentralised finance applications. Around 40 percent of collateral deposited in on-chain lending markets consists of liquid-staking tokens, according to TokenLogic data cited in the report.

The Question Investors Need Answered
The analysis ultimately comes down to a crucial question for investors: can Ethereum convert its technological growth into sustainable economic value for ETH?

The potential remains significant. Ethereum is establishing itself as a leading platform for stablecoins, decentralised finance and tokenised real-world assets, while its Layer 2 ecosystem continues to open up additional use cases.

But the investment thesis has yet to be fully proven. As long as blockspace and data capacity remain abundant, Layer 1 fees are likely to stay low.

If growing adoption eventually creates greater demand for Ethereum's underlying settlement and data infrastructure, today's weak value capture could prove temporary.

If it does not, investors face a rather unusual prospect: Ethereum could become increasingly important as infrastructure for the digital financial system – while Ether itself benefits only to a limited extent.