Here is the English translation of the text, with the specified terms translated as instructed: After the recent bull market correction, the price of ETH has once again risen above $3,900. Looking back on the development of Ethereum over the past year, there are many complex factors and emotions. On the one hand, the successful completion of the Cancun upgrade, the official approval of the spot ETF, both technically and fundamentally, have brought a new bullish outlook; on the other hand, with the consecutive breakthroughs of new highs in Bitcoin, Solana, and BNB, the price of ETH is still hovering around the $4,000 mark. From the price trend chart of ETH this year shown in the image, Ethereum has experienced three major stages this year, and the rallies in these three stages correspond to different reasons. At the beginning of the year, with the approval of the Bitcoin spot ETF, the price of Ethereum rose along with the market sentiment, once breaking through $4,100, but at the end of March, it also started to decline with the overall market. Due to the strong surge of Solana and its ecosystem, Ethereum's ecosystem has faced a large outflow of liquidity. In May, the Ethereum spot ETF was approved, and the price briefly surged, but the demand was not as strong as that for the Bitcoin ETF. The initial market reaction to the launch of the Ethereum ETF was negative, as speculative investors who had bought the Grayscale Ethereum Trust and expected it to convert to an ETF took profits, resulting in a $1 billion capital outflow, putting downward pressure on the price of Ethereum. In addition, the narrative of Ethereum being more of a tech product compared to Bitcoin's "digital gold" makes it less appealing to traditional markets, and the SEC's restriction on Ethereum spot ETFs from engaging in staking functions has also objectively weakened its attractiveness. After that, a series of events such as the Ethereum Foundation, the re-staking ecosystem, and the debate over the roadmap came one after another, and Ethereum entered a dark period. In November, with the US election dust settled, the crypto-friendly Republican Party and Trump brought stronger confidence and liquidity injection to the entire crypto ecosystem, and Ethereum also ushered in the third wave of rallies this year. This rally is different from the past, with institutions openly entering the market, and the improvement of the liquidity fundamentals, the market is using capital to tell us what institutions recognize and are optimistic about; and Ethereum is destined to continue its original vision of being the "world computer". Improvement of Liquidity Fundamentals Since December, the Ethereum spot ETF has seen net inflows of over $2.2 billion for half a month, and Nate Geraci, president of The ETF Store, said on social media that advisors and institutional investors are just beginning to focus on this area. In the third quarter of this year, major banks such as Morgan Stanley, JPMorgan, and Goldman Sachs have significantly increased their holdings of Bitcoin ETFs, with their quarterly holdings nearly doubling. But their investment scope is not limited to Bitcoin, as the latest 13F filings show that these institutions have also started buying Ethereum spot ETFs since then. In addition, in the first two quarters, the Wisconsin State Investment Board and the Michigan Retirement System respectively purchased Bitcoin spot ETFs, and Michigan further purchased over $13 million worth of Ethereum spot ETFs in the third quarter. This indicates that pension funds, which represent low-risk preferences and long-term investments, not only recognize Bitcoin as a digital store of value, but also value the growth potential of Ethereum. When the Ethereum spot ETF was first approved, JPMorgan had pointed out in a report that the demand for Ethereum spot ETFs would be far lower than that for Bitcoin spot ETFs, but the report estimated that Ethereum spot ETFs would attract net inflows of up to $3 billion for the rest of the year, and if staking was allowed, this figure could reach $6 billion. Jay Jacobs, head of US thematic and active ETFs at BlackRock, said at the "ETFs in Depth" conference that "our exploration of Bitcoin, especially Ethereum, is just the tip of the iceberg, with only a small number of clients holding (IBIT and ETHA), so our focus is on this area rather than launching new Altcoin ETFs." In a Blockworks Research survey report, the vast majority (69.2%) of respondents currently hold ETH, of which 78.8% are investment companies or asset management companies, indicating that driven by yield generation and network security contribution, institutional willingness to participate in ETH staking has reached a critical mass. Institutions are actively participating in ETH staking, but the degree and method of participation vary, and the uncertainty of regulation has led to different attitudes, with some institutions being cautious, while others are not too concerned, and institutional participants have a high awareness of the operational aspects and risks associated with staking. Reversal of Trends After the FTX collapse, Coinbase, Kraken, Ripple and other companies have been severely cracked down by US regulators such as the SEC, and many crypto projects cannot even open accounts with mainstream US banks. The traditional financial institutions that entered the market through DeFi in the previous bull market have also suffered huge losses, such as Toma Bravo, Silver Lake, Tiger, Cotu and other major funds, not only suffered setbacks on FTX, but also invested at high valuations in some crypto projects that failed to fulfill their grand promises, and the funds have not yet flowed back. In the second half of 2022, many DeFi projects were forced to migrate outside the US, and according to qw, the co-founder of Alliance DAO, "About 80% of crypto startups that met the standards were located in the US two years ago, but this proportion has been declining since then and is now only about 20%." But on November 6, Trump's victory lit the green light that the US financial system had been waiting for. Trump Saves the Crypto World Trump's victory undoubtedly cleared the regulatory clouds for institutional adoption. The establishment of the Department of Government Efficiency, directly gathering a series of Wall Street financial elites such as Musk, Pittell, and Markandsen under its banner, and the appointment of Paul Atkins as SEC chairman, and then the appointment of PayPal co-founder David Sacks as the "White House AI and Cryptocurrency Affairs Officer", all these measures indicate that Trump will build an administration with a relaxed crypto regulatory environment. JPMorgan analysts said that several stalled crypto currency bills, including the FIT21 Act, which clarifies the regulatory responsibilities of the SEC and CFTC, may be quickly approved after Trump takes office, potentially providing the much-needed regulatory clarity for the crypto industry. They also said that as the regulatory framework becomes clearer, the SEC's enforcement-heavy strategy may evolve into a more collaborative approach, and its restriction on banks holding digital assets under SAB 121 may be repealed. The high-profile lawsuits against companies like Coinbase may also be eased, settled or even withdrawn. The regulatory notices sent to companies like Robinhood and Uniswap can be reconsidered, reducing litigation risks across the broader crypto industry. In addition to department and legislative reforms, the Trump team is also considering drastically cutting, merging or even abolishing the major bank regulatory agencies in Washington. Insiders revealed that Trump advisors have asked some Department of Government Efficiency personnel whether the FDIC can be abolished when interviewing potential candidates for bank regulatory agencies. Trump advisors have also inquired about potential candidates for the FDIC and the Office of the Comptroller of the Currency, and have proposed plans to merge or completely reform the FDIC, OCC and the Federal Reserve. As the policy dividends are gradually released, larger-scale institutional capital in the US market is expected to return to the crypto market.

DeFi Revival in Progress

Family offices, endowments, pension plans and other more conservative capital not only will allocate to Ethereum spot ETFs, but will also re-enter the DeFi space that was validated in the previous cycle.

Compared to 2021, the total supply of Altcoins has reached an all-time high, and in the more than a month since Trump's victory, the total Altcoin supply has increased by nearly $25 billion, with the current total Altcoin market cap reaching $202 billion.

As the leading U.S. crypto public company, Coinbase has made contributions not only politically, but also in the DeFi space this year, serving as the largest crypto ETF custodian on the one hand, and launching cbBTC on the other.

Due to cbBTC facing the same custodial and counterparty risks as most Bitcoin ETFs, some traditional financial institutions may re-evaluate whether to continue paying fees to hold Bitcoin ETFs, and instead turn to participating in the DeFi ecosystem at almost zero cost. This shift could bring capital inflows to DeFi protocols that have been market-tested, especially as the yields offered by DeFi are more attractive than traditional finance.

Another major DeFi sector this cycle is RWA, with BlackRock formally entering the RWA track in March this year by partnering with the U.S. tokenization platform Securitize to issue the tokenized fund BUIDL (BlackRock USD Institutional Digital Liquidity Fund). Capital giants like Apollo and Blackstone, who control massive pools of funds, are also starting to prepare to enter this market, bringing a huge influx of liquidity.

After the Trump family launched a DeFi project, compliant DeFi has been a hot topic. Ethereum blue-chip DeFi projects like Uniswap, Aave, and Lido immediately reacted with price increases after Trump's victory, while newcomers in the DeFi sector like COW, ENA, and ONDO also hit new highs.

Meanwhile, the Trump crypto DeFi project WLFI has been frequently trading Ethereum-based tokens recently, exchanging $5 million USDC for 1,325 ETH in multiple transactions, and then buying $10 million ETH, $1 million LINK and $1 million AAVE in its multi-signature address. The news of whales increasing their ETH holdings has been constant, indicating that both institutions and whale accounts are refocusing on the Ethereum ecosystem.

The price performance of new and old projects in the DeFi sector speaks for itself. Currently, the DeFi TVL is around $100 billion, and the total value of cryptocurrencies and related assets is around $4 trillion, with only 2% of the truly active capital in the DeFi space, which is still very small compared to the overall crypto market size. This means that under the warming regulatory environment, DeFi still has huge growth potential.

Aave is a typical beneficiary of this "capital inflow" cycle, with its price having already broken through before Trump's victory, and its TVL and revenue subsequently experiencing explosive growth: TVL broke through the October 2021 historical high to reach $22 billion; the token price has risen from the year's low of 80 USDT to break the March high of 140 USDT in early September, and accelerated its rise in late November; the protocol's daily total revenue has exceeded the September 2021 second highest peak, and its weekly revenue has set a new high.

Although Aave has recently upgraded to V4, its technical innovation may not be sufficient to support such a massive rally, and the drivers from the regulatory and capital perspectives are obviously more important, and this drive may also spill over to the NFT sector, which also gained institutional favor in the previous cycle.

The Future of Ethereum

However, Ethereum has faced a series of controversies and discussions related to ecosystem development in the middle of this year, and with the rise of Solana, new and old public chains have begun to seize Ethereum's developers and user base, and the ecosystem has begun to shake, as if Ethereum has forgotten its original goal. As the first blockchain to build smart contracts, Ethereum has successfully made major institutional investors buy in through its first-mover advantage in the last cycle, whether it's DeFi, GameFi, or NFTs and the metaverse, they cannot escape the Ethereum ecosystem, and its "world computer" vision has already taken root.

Although Ethereum's fundamental liquidity has generally improved, in terms of Ethereum itself, its daily transaction volume, Gas fees, and active address count have not shown significant growth. This indicates that Ethereum's on-chain activity has not risen in sync with its price, and its block space is still oversupplied.

In the past few years, Ethereum's focus has been on building the infrastructure for cryptocurrencies, providing a large amount of cheap block space for the market. On the one hand, this has improved the access performance of Dapps to blocks and reduced the transaction costs of L2 scaling solutions, but on the other hand, due to insufficient market liquidity and low transaction demand, Ethereum's massive block space has not been fully utilized.

However, this is not a real problem in the long run. As mentioned earlier, institutional capital is gradually flowing back, and even starting to build their own blockchain use cases. For Ethereum, which has security and flexible architecture, B2B is its advantage. It not only has an overwhelming advantage in security, but can also be compatible with many EVM projects, providing developers with an almost "impossible to be fired" choice.

Ethereum's long-term value will depend on the scarcity of its block resources, i.e., the actual, sustained demand for Ethereum block settlement in the world. As more institutions and applications flow in, this scarcity will become increasingly prominent, laying a more solid value foundation for Ethereum. Ethereum is an institutional world computer, and starting from DeFi, institutions will solve the problems of Ethereum's block oversupply and roadmap disputes in the future.

In early December, Ethereum researcher Jon Charbonneau wrote a long article analyzing why Ethereum needs a clearer "North Star" goal, and also suggested that Ethereum's ecosystem power should be focused on the "world computer" concept, just as Bitcoin's is the "digital gold" and Solana's the "on-chain Nasdaq".

After 10 years, Ethereum is no longer in the startup stage, and in the next 10 years, Ethereum's future is already clear.

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