Ethereum will be the biggest beneficiary of digital asset reserves

On the third day of his presidency, Trump finally responded to the issue of a national reserve of Bitcoin. On January 23, he signed an executive order aimed at optimizing cryptocurrency regulation and ensuring that the United States maintains a global leading position in the field of digital assets. In order to fulfill his promise to establish a national reserve of Bitcoin, Trump instructed the White House crypto director, the Secretary of the Treasury, the Chairman of the Securities and Exchange Commission and other relevant department heads to form a special working group to assess the feasibility of establishing a digital asset reserve and develop relevant standards. In addition, the executive order also pointed out that the digital assets of the national reserve can come from assets confiscated in law enforcement actions.

After the executive order was issued, Polymarket predicted that Trump's probability of achieving a national reserve of Bitcoin within 100 days rose from 30% to 40%. At the same time, the price of Bitcoin quickly soared from $102,500 to $106,000, with the maximum intraday increase reaching 3.4%. Unfortunately, however, all the gains were lost in the following 6 hours. The main reason for the cold market reaction is that the establishment of a long-term Bitcoin national reserve mechanism requires a solid legal basis, which means that Congress needs to introduce supporting bills. In addition, the funding source of the national reserve plan involves government budget and financing, which also requires congressional approval. As we all know, the decision-making efficiency of the U.S. Congress is low, and the interests of various forces are complicated, making it almost difficult to reach a consensus in the short term. The most typical example is META's global payment system Libra, which eventually died in the argumentation of Congress.

Since there are many challenges in establishing a long-term national reserve mechanism for Bitcoin, Trump tends to implement a symbolic national reserve plan: transfer the Bitcoins kept by the U.S. Marshals Service to a special fund under the Treasury Department (such as the Exchange Stabilization Fund) or a fiscal plan, and announce that they will not be sold within a certain period of time in the future. Although the transfer of Bitcoins may involve the fiscal budget, it is not difficult for the Republican-dominated Congress to pass this matter.

Previously, many institutions' optimistic forecasts for Bitcoin's trend in 2025 were mainly based on the assumption of government involvement. If Bitcoin can occupy the same allocation ratio in the US national reserves (5%-7%) and pensions (1%-2%) as gold, the incremental inflow into the crypto market will reach about $50 billion, which will push the price of Bitcoin above $150,000. Now that the expectation of government holdings has failed, the rise of Bitcoin in 2025 will be greatly reduced, which is why we previously believed that this year's increase may only be 30% to 40%. ($122,000-$130,000)

Although Trump's new crypto policy on January 23 was quite conventional, some changes in the expression did reveal new opportunities. For example, expanding the national reserve target from Bitcoin to the entire digital asset field is undoubtedly a major benefit to ALTS tokens. At present, the ALTS token most likely to be included in the national reserve is ETH, mainly for the following two reasons: First, ETH is the second largest crypto asset held by the US government (53,900 pieces), and it is very convenient to transfer it directly to the national reserve. At the same time, Ethereum is the second spot ETF traded on the New York Stock Exchange after Bitcoin, and the compliance basis is perfect; second, the Trump family's WLFI has recently bought ETH many times in a row, and ETH and stETH account for as much as 72% of the portfolio. This active layout seems to have grasped some kind of benefit in advance.

Recently, the market has launched a movement to save Ethereum, and the founders of well-known projects such as Lido, Curve, and Aave have joined the discussion. Although community members have different opinions, their suggestions are always focused on three aspects. First, Ethereum should strengthen the construction of L1 and upgrade its infrastructure to ensure that it can compete with high-performance public chains such as SOL and SUI in terms of cost and efficiency. Secondly, reduce the bloodsucking of L2 on L1, strengthen the binding of L2 and L1, and increase the application scenarios of ETH in L2. Finally, reform the Ethereum Foundation, eliminate inefficient departments, formulate attractive incentive mechanisms, change the past "Buddhist" state, and add windows for external marketing.

Under the pressure of the community, Vitalik, who has been playing Tai Chi, finally expressed his position: he still supports the expansion plan of L2, but will impose a "toll" on L2. In the past, a large number of L2 projects have been promoting the de-Ethereumization of L2 while enjoying the security of L1. For example, poaching projects on the Ethereum mainnet to reduce the mortgage and consumption application scenarios of ETH in L2. The most typical example is that many L2 projects have gradually replaced ETH as the position of L2 processing node collateral and network GAS with governance tokens, which has greatly weakened the influence of Ethereum in the ecosystem. As a result, Ethereum has been continuously sucked by a large number of governance tokens with a valuation of billions of dollars. In the era of rapid expansion of L2, ETH is more like a decentralized central clearing bank, and it is completely reasonable to charge channel fees or membership fees to member units for transactions. In short, rebuilding the synergy mechanism of L1 and L2 has become the easiest and most effective way to boost the fundamentals of Ethereum.

So far, I still believe that Ethereum is very likely to be successfully rescued. After all, the core competitiveness of decentralization and ecology has not been lost. With the gradual implementation of pledgeable Ethereum ETFs, hybrid ETFs, and national reserve Ethereum, Ethereum is still expected to usher in a new round of incremental buying.