Institutional Investors' Ambitions: The New Script for the Crypto Market in 2026 and ETH's Hundred-Billion-Dollar Dream

The Deep Logic Behind Large-Scale Sell-Offs

Recently, the founder of an investment institution announced on social media that they are preparing $1.1 trillion to sweep up Ethereum (ETH) in a new round of buying. Although the current holdings face an unrealized loss of $1.41 million, their unwavering conviction remains—by 2026, the crypto market will experience an epic bullish cycle.

This is not unfounded. The research firm began accumulating ETH in early November when the price was $3,400. To date, they have purchased approximately 580,000 ETH, with a total investment of $1.72 trillion, averaging about $3,208 per ETH. Confronted with current paper losses, the institution has chosen a bold strategy—doubling down instead of cutting losses. This high leverage reflects the collective market expectation within the institutional investment circle for 2026.

Structural Opportunities Reshape Market Dynamics

Unlike before, the 2026 crypto market is undergoing an unprecedented structural transformation.

The way institutional funds enter has fundamentally changed. The explosive growth of Ethereum spot ETFs and tokenized assets is creating a demand foundation that did not exist in previous cycles. On-chain data shows that the total value locked (TVL) in DeFi on Ethereum Layer-1 has exceeded $67.8 trillion, while Layer-2 networks hold about $43 trillion. This clearly delineates the boundary between settlement and execution layers.

Retail activity is increasingly concentrated on Layer-2 ecosystems, while institutional capital continuously flows into Layer-1 through regulated, compliant spot ETFs and tokenized financial products. This evolution is gradually transforming Ethereum’s base layer into a pillar for settlement, staking, and security.

The tokenization wave has become the core engine of new narratives. Larry Fink, CEO of BlackRock, pointed out in The Economist: “We have finally found the true use case of blockchain: tokenization.” This marks a critical point where traditional finance and crypto technology converge. With leadership changes at the U.S. Securities and Exchange Commission, regulatory tolerance has significantly increased, clearing obstacles for large-scale tokenization applications.

The growth momentum of stablecoins is even more unstoppable. A research institution predicts that stablecoin trading volume will surpass traditional ACH (Automated Clearing House) systems and will deeply collaborate with traditional financial institutions. On-chain data shows that stablecoin supply is growing at a compound annual rate of 30%-40%, with trading volumes rapidly increasing, already surpassing the transaction scale of mainstream credit card networks like Visa.

Tension Between Market Expectations and Reality

Despite widespread optimism about 2026, the market still faces multiple uncertainties.

Ethereum’s relative weakness compared to Bitcoin remains unchanged. An analysis platform pointed out that ETH has yet to recover the previous cycle’s high relative to Bitcoin. A deeper issue is that Ethereum has maintained a high correlation with Bitcoin over the long term, acting more as a leveraged proxy for Bitcoin rather than an independent store of value. Many investors take profits during price rallies to seek liquidity, which weakens long-term confidence in ETH.

Volatility predictions vary greatly. A research institution boldly forecasted that Bitcoin’s volatility would be lower than Nvidia’s, implying a new understanding of crypto asset stability. However, in reality, the ETH/BTC exchange rate has erased all gains from the previous cycle, and market confidence remains at multi-year lows.

Some smaller tokens face marginalization risks. An analyst predicts that liquidity in 2026 will be more concentrated in blue-chip crypto assets, making a “altcoin season” unlikely. Most small tokens will be forgotten by the market.

The Full Arrival of the Institutional Era

2026 may mark a critical turning point where the crypto market shifts from fragmentation to institutionalization.

Some data research predicts that, as institutional demand accelerates, the spot ETF purchases of Bitcoin, Ethereum, and Solana will exceed new supply by over 100%. Half of Ivy League fund portfolios will allocate to crypto assets, and the U.S. will launch over 100 crypto-related exchange-traded products (ETPs). This scene depicts a year of massive institutional capital inflows, improved regulatory frameworks, and the transformation of traditional financial infrastructure.

An institutional division at a major exchange believes that 2026 will see the emergence of the “DAT 2.0” model—no longer just asset accumulation, but a comprehensive system encompassing professional trading, custody services, and sovereign blockchain space acquisition, viewing these as key resources of the digital economy.

For crypto natives, this is both an opportunity and a challenge. The opportunity lies in the exponential growth of market size, but the challenge is the rewriting of rules by traditional finance. When asked why they continue to add positions despite unrealized losses, the founder of the institution replied simply and powerfully: “We know it will go up a lot in the end; we just don’t know when.”

Currently, a blockchain company holds 4.07 million ETH, worth about $119.7 billion; another gaming company holds 863,000 ETH, valued at approximately $25.4 billion. The total ETH held by institutions continues to grow. Market observers are fiercely debating: Is this the prelude to the next bull market, or a capital game built on leverage and narratives? The answer may only be revealed in 2026.

The current price of Ethereum (ETH) is $3.14K, while Bitcoin (BTC) is $91.47K. The emergence of this bearish signal contrasts sharply with institutional optimism, creating one of the most tension-filled debates in the market.