Stablecoins and RWAs continue to expand: Can Ethereum leverage this to start a new growth cycle?

At 3:00 PM Beijing time on July 3, 2026, the crypto market saw a broad rebound. According to Gate market data, Ethereum (ETH) rallied from a 24-hour low of $1,605 to an intraday high of $1,724.32, and was reported at $1,705.40 as of July 3 Beijing time, up 6.26% in a single day, leading the major cryptocurrencies. Bitcoin also strengthened, rebounding from $59,776 to $61,507. However, the market sentiment indicator, the Fear and Greed Index, was only 21, still in the "extreme fear" range, showing a clear divergence between price and sentiment.

Behind this price performance, Ethereum's network fundamentals are undergoing profound changes. As of July 1, 2026, the total supply of stablecoins on the Ethereum mainnet was approximately $153.3 billion; if a broader caliber is included, this figure has exceeded $180 billion, accounting for about 60% of the global stablecoin supply. Meanwhile, the tokenization market for real-world assets (RWA) continued to expand in the first half of 2026, with on-chain tokenized asset sizes surpassing $43 billion.

The price increase was driven by a short squeeze and improved macro sentiment, but the truly noteworthy structural question is: Can the continued expansion of stablecoins and RWAs provide ETH with value support beyond short-term fluctuations? Analyze from three dimensions: on-chain data, institutional behavior, and asset attributes.

Why Stablecoins "Prefer" Ethereum

Stablecoins are the largest application scenario in the Ethereum ecosystem. As of July 1, 2026, the total circulating supply of USD-pegged stablecoins on the Ethereum mainnet was approximately $153.3 billion. Among them, USDT's supply on Ethereum was $78.93 billion, accounting for 42.75% of the global USDT supply; USDC's supply on Ethereum was $47.02 billion, accounting for 64% of the global USDC supply. If EVM-compatible Layer 2 networks such as Arbitrum, Base, and ZKSync Era are included, the proportion of stablecoins in the Ethereum ecosystem rises to over 65%.

From a broader perspective, Dune data shows that as of May 2026, Ethereum carries about 55% of the global stablecoin supply—out of approximately $340 billion in total stablecoin supply, nearly $190 billion is on Ethereum; Tron has about $90 billion, and the remaining chains together about $60 billion. The total stablecoin supply has nearly doubled in the past 24 months, but Ethereum's share has remained stable.

This pattern did not form by accident. Stablecoin issuers choose Ethereum as the primary deployment network based on the following logic:

First, the accumulation of security and network effects. Ethereum has been running continuously since its launch in 2015. As of March 2026, about $76 billion in staked ETH secures the network, with a geographically diverse validator network and multiple independent client implementations. For stablecoin issuers holding tens of billions of dollars in reserves, the network's security record is the primary consideration.

Second, deep aggregation of liquidity. The core function of stablecoins is as a settlement medium, and settlement efficiency depends on the concentration of liquidity. Ethereum hosts the deepest DeFi liquidity pools, the widest exchange support, and the most mature market maker network, forming a positive cycle: "more concentrated liquidity → lower settlement costs → more issuers choose to deploy."

Third, maturity of compliance infrastructure. From 2025 to 2026, the regulatory framework has gradually matured, moving institutional on-chain activity from theory to practice. On July 1, 2026, CACEIS Bank launched a MiCA-compliant euro stablecoin, EURXT, on Ethereum, with an initial supply of 20.02 million euros. This case demonstrates that Ethereum has become the preferred infrastructure for regulated financial institutions to issue stablecoins.

Stablecoins are the largest asset class on Ethereum, and their network effects form the most basic "value floor" for ETH.

Why Tokenized Assets Favor Ethereum

If stablecoins are Ethereum's "existing base," then RWA tokenization is its "incremental growth pole."

As of May 2026, including representative assets, the total size of tokenized assets has exceeded $381.8 billion, with Ethereum firmly in first place with about 55% market share. The tokenized US Treasury sector, approaching $15 billion, has become the growth engine of the RWA segment. Looking at more granular on-chain data, Ethereum carries about two-thirds of the tokenized RWA value.

In terms of asset class structure, tokenized US Treasuries are currently the largest single category, with a size of about $15 billion; tokenized commodities are close to $6 billion, and tokenized private credit exceeds $4.5 billion. The three categories of Treasuries, commodities, and credit constitute the absolute main body of the current RWA market. Wallet addresses holding RWA assets have increased from about 637k to over 796k, with the increase mainly coming from centralized deployments by institutional entities.

Institutions choose Ethereum as the primary deployment network for tokenized assets, with decision-making logic highly consistent with stablecoin issuers, but with additional considerations:

The view of Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered Bank, is representative: For institutional investors who need to be answerable to their board and compliance departments, Ethereum represents a "defensible default choice." Years of security record, the broadest institutional ecosystem, the most mature compliance tools, and the deepest DeFi liquidity together form Ethereum's structural moat that is difficult to challenge.

In its 2026 thematic outlook, BlackRock positioned Ethereum as a core financial infrastructure rather than a speculative asset. The report describes Ethereum as the "toll road" for tokenization—its value is generated through transaction flows, settlement, and issuance, not through trading activity. The report notes that over 65% of tokenized assets are currently issued on Ethereum. This judgment from the world's largest asset manager provides an important endorsement for Ethereum's positioning in the RWA track.

On July 2, 2026, Ondo Finance launched tokenized versions of BlackRock's iShares Core S&P 500 ETF and Micron stock on Ethereum, using a third-party custody framework described by the SEC in January 2026. This issuance represents the first time a third party has tokenized listed securities on a public blockchain within the existing U.S. regulatory framework. As of June 8, 2026, the tokenized stock market cap reached $5.5 billion, up about 147% from $2.23 billion at the beginning of the year.

The RWA share growth of BNB Chain and Solana is not negligible—BNB Chain ranks second with about $3.6 billion, and Solana has more than doubled within the year—but it is not yet enough to challenge Ethereum's dominant position in institutional-grade asset tokenization in the short term.

Can Institutional Adoption Increase ETH Network Value

The expansion of stablecoins and RWAs brings real usage demand to Ethereum, but whether this demand can translate into value growth for ETH is the most concerned issue in the market.

From the demand side, ETH is gaining diversified value capture paths. Ethereum's core value is shifting from "traffic" to "settlement sovereignty": ETH's value is no longer limited to Gas or Blob revenue, but lies in its institutional premium as the world's most secure EVM settlement layer and native monetary asset. Various stablecoins, tokenized funds, commodities, and on-chain stocks are all issued and settled on Ethereum. After Layer 2 networks divert transactions, they ultimately return to Layer 1 for confirmation, allowing ETH to accumulate value continuously. Every institutional settlement completed on Ethereum and every security stake of a Layer 2 network ultimately requires ETH as a value medium.

From the supply side, ETH's staking mechanism is strengthening its scarcity. As of 2026, nearly 39.1 million ETH has been staked, accounting for about 32% of ETH's total supply, distributed among over 896,000 active validators. The staking mechanism transforms ETH from "transaction fuel" into a "productive asset"—institutions not only need ETH to pay transaction fees but also need ETH to participate in network consensus to earn returns.

From the perspective of institutional behavior, important structural signals emerged in July 2026. On July 1, the independent non-profit organization Ethereum Institutional was officially launched, supported by BitMine Immersion Technologies, SharpLink, and Ethereum co-founder Joe Lubin, aiming to accelerate the adoption of the Ethereum mainnet, Layer 2 networks, and the broader ecosystem by large global financial institutions. The organization has already established over 500 institutional relationships, covering banks, asset management companies, sovereign institutions, custodians, and market infrastructure providers. Its "Institutional Ethereum Forum" has convened over 150 executives and digital asset leaders, representing a total of approximately $250 trillion in assets under management.

Meanwhile, supporters continue to invest funds into Ethereum. It is reported that BitMine purchased an additional $90 million worth of ETH, bringing its holdings close to 4.7% of the total supply, with a target of 5%; SharpLink resumed purchases after an eight-month pause, adding about $62.4 million worth of Ethereum.

However, from a price perspective, the improvement in on-chain fundamentals has not yet been fully reflected in ETH's market pricing. As of July 3, 2026, ETH's price was $1,705.40, with a market cap of approximately $637k, down about 65% from its all-time high of $4,946 set in August 2025. Ethereum's average total value locked (TVL) in the ecosystem in Q1 2026 was $316.2 billion, down 11% quarter-over-quarter but up 22.8% year-over-year. The divergence between price and usage is consistent with the pattern of previous cycles—ultimately, network fundamentals regain higher valuations.

This divergence also suggests risk: the transmission path from on-chain usage to ETH price appreciation is not direct, depending on fee revenue, supply dynamics, and the market's repricing of Ethereum's long-term value. The expansion of stablecoins and RWAs creates structural demand for ETH that pure speculative assets lack, but whether and when this demand translates into price support still depends on the resonance of multiple factors.

Conclusion

As of July 2026, Ethereum maintains a significant dominant position in both stablecoin and RWA tracks. Over $180 billion in stablecoin supply, about 55% RWA market share, strategic endorsements from top institutions like BlackRock, and the official launch of Ethereum Institutional together outline a clear narrative: Ethereum is evolving from a "smart contract platform" to a "global financial settlement layer."

The impact of this evolution on ETH's value is structural. ETH's role is transitioning from a utility token for paying Gas fees to a reserve asset supporting the settlement of trillion-dollar on-chain assets. The expansion of stablecoins and RWAs provides ETH with real, sustained, and growing usage demand—this demand differs from speculative trading, having stronger stickiness and lower volatility.

However, the transmission from on-chain fundamentals to market price is not linear. There is a significant divergence between ETH's current price of $1,705 and the strong growth in on-chain activity. This divergence may mean the market has not fully priced in Ethereum's structural value, or it may mean there are obstacles in the transmission path that are not fully understood—such as declining fee revenue, Layer 2 value capture issues, and tightening macro liquidity.

For investors focused on Ethereum's long-term value, the expansion of stablecoins and RWAs provides an analytical framework that transcends short-term price fluctuations. Network usage determines the lower bound of infrastructure value, while market consensus determines its upper bound. Ethereum's lower bound is being continuously raised by the sustained expansion of stablecoins and RWAs, while the upper bound depends on broader market recognition and capital inflows.

FAQ

Q: Is Ethereum's dominant position in the stablecoin market being eroded?

Ethereum still carries about 55%–60% of the global stablecoin supply, with its share remaining stable over the past two years. Tron has an advantage in low-cost USDT transfers, and chains like Solana are also growing, but Ethereum's dominant position in institutional-grade stablecoin issuance and settlement has not been substantially challenged.

Q: What is the current market size of RWA tokenization?

As of mid-2026, the total value of on-chain tokenized RWA markets has exceeded $43 billion. If representative assets are included, the overall size has surpassed $381.8 billion. Tokenized US Treasuries are the largest single category, with a size of about $15 billion.

Q: Why has ETH's price not reflected the improvement in on-chain fundamentals?

ETH's current price is down about 65% from its all-time high, while on-chain stablecoin and RWA sizes continue to grow. This divergence arises from multiple factors: tightening macro liquidity, persistent net outflows of ETF funds, and short-term market concerns about Ethereum's "declining fee revenue." Historical cycles show that improvements in network fundamentals eventually reflect in valuations, but transmission takes time.

Q: What does the establishment of Ethereum Institutional mean for ETH?

Ethereum Institutional, founded on July 1, 2026, is an independent non-profit organization aimed at providing a neutral entry point for banks, asset management institutions, etc., into the Ethereum ecosystem. It has already established over 500 institutional relationships. The founding of this organization reduces the coordination cost for institutional adoption of Ethereum and is an important institutional infrastructure in the institutionalization process.

Q: Is the expansion of stablecoins and RWAs sufficient to drive ETH into a new bull market?

Stablecoins and RWAs provide ETH with structural demand that pure speculative assets lack. However, the start of a bull market also requires the resonance of multiple factors, including improved macro liquidity, the return of institutional funds, and further establishment of market consensus on Ethereum's "settlement layer" value.