ETHA: The Stablecoins Catalyst

Summary Ethereum remains a strong buy due to its dominant position in stablecoin activity, which is set to accelerate under the new GENIUS Act. Stablecoin volume on Ethereum is projected to grow 15x by 2030, driving significant fee (gas) revenue and supporting long-term price appreciation. Current on-chain metrics, including MVRV, indicate Ethereum is undervalued with substantial upside potential as network activity increases. I recommend long-term investment in Ethereum, either directly or via ETFs like ETHA, to capitalize on institutional adoption and DeFi leadership. Introduction Since my first update on Ethereum back in April of this year (buy recommendation), the asset has appreciated 52.82% compared to 12.89% for the S&P 500 YTD. Today, we will analyse the asset again from the perspective of stablecoin activity as a catalyst for value and price appreciation. On 4 February 2025, the GENIUS bill (Guiding and Establishing National Innovation for US Stablecoins Act of 2025) was presented to the US Senate. Basically, this law establishes a federal framework for action and best practices for ‘Payment Stablecoins’ assets. It requires stablecoin issuers to comply with the Bank Secrecy Act, with the corresponding implementation of KYC procedures and transaction monitoring through the Travel Rule. The aim of this is to leverage blockchain technology at the transactional and transparency level to improve transaction efficiency and settlements, avoid surprises in collateral quality, and protect the end user. With this regulation, the cryptographic system has been provided with the ideal conditions for mass adoption based on trust and the entry of traditional financial players (see Visa , Mastercard , or JPMorgan ). In today’s article, we will analyse Ethereum’s asset from the perspective of stablecoin flow as a massive catalyst of value and compare it with other networks of the same type. Analysis – On – Chain With the GENIUS law currently in place, and also previously, the volume of tokenised money (stablecoins) has grown significantly to reach approximately USD 250 billion. With the approval of this law, it is estimated that between now and 2030 there will be exponential growth in the volume of stablecoins, multiplying the current amounts by 15 to reach USD 4 trillion in tokenised money. As we can see in the image below, the Ethereum network dominates the market in terms of this activity, far surpassing its main competitors (Tron, Binance, and Solana). This data is very important in terms of investment thesis, as the existence of a higher volume generates higher fees (revenue) for the protocol itself. With this and the network’s configuration in terms of burning supply through L2 fees, conditions are often created for a sustained price increase. Node Analytica Secondly, we now turn to the volume of stablecoins flowing through the Ethereum network. As we can see in the graph, the current volume reaches 100 billion dollars on a weekly basis. This volume is mainly dominated by the USDT, USDC and DAI protocols. The companies that own these protocols, Tether, Circle and MakerDAO, collateralise liquid assets such as treasury bills or cash & equivalents with which they back their own stablecoins. As mentioned above, with the approval of the GENIUS Act, we will gradually begin to see players from the traditional financial industry entering this market. We can also see in the graph that, in recent times, the volume of stablecoins has grown significantly on the Ethereum network, rising from 70 billion USD to 100 billion. Among other things, this has led to a price increase, but not enough in my opinion, which is why I believe the asset is undervalued, although we will discuss this in detail in the last part of the article. Node Analytica The following image shows the amount of gas (revenue) generated by the different sectors operating within the Ethereum network. Readers should not be alarmed by the shape of the graph and the gas levels generated during 2022, as this was typical of the network when it operated under the Proof of Work (PoW) protocol. Current levels are actually normal. The information in this graph is crucial to our bullish thesis because greater gas generation by the different sectors leads to greater use of the network, ultimately resulting in greater utility, transactionality, and speed in the token that models the Ethereum economy. Node Analytica In this graph, we isolate the ‘Stablecoins’ sector and calculate the cumulative sum of Gas contributed to the Ethereum protocol throughout history to see how important the sector has been and to look at its growth potential. As we can see, the ‘Stablecoins’ sector has generated fees for the protocol of more than USD 1.4 billion over time and continues to trend upwards. If the scenario for 2030 mentioned above were to come to pass and the volume of stablecoins grew by 1,500%, this would translate into an increase in the same magnitude in the Gas generated by this sector and, therefore, a massive increase in the price of the asset. I firmly believe that we are facing unprecedented growth in Ethereum, which, accompanied by the flow of institutional capital already flowing into it, makes this asset a unique investment opportunity. Node Analytica Finally, we look at Ethereum’s MVRV metric, which compares market value to realised value. It is currently around 0.4, a level that in previous cycles has coincided with moments of undervaluation. When the Market Value Realised Value has reached values between 1.5 and 2, Ethereum has marked local highs around USD 4,000 before entering an overbought zone from a technical point of view. Furthermore, if we look at the price ranges based on this ratio, the highs in this cycle are projected to be between USD 4,800 and USD 6,400. With the current price close to USD 2,500, the upside potential remains very significant, especially if activity on the network accelerates thanks to the volume of stablecoins operating on the network. This leads us to an important consideration: is the market underestimating the potential for commission income (gas) on Ethereum? A higher volume of stablecoins translates into more transactions, more fees, and a strengthening of the asset’s role as a driver of the decentralised finance sector. This dual momentum—network usage fees and leadership in DeFi—could lead us to reconsider the fair value of ETH in the coming quarters. CryptoQuant Conclusion In conclusion, and to wrap up this article, I recommend investing in Ethereum for the long term, either by purchasing the asset itself on secure exchanges such as Coinbase or by investing in exchange-traded funds (ETFs) such as the iShares Ethereum Trust ETF ( ETHA ) promoted by BlackRock. If you choose to gain exposure to the asset through the ETF, you will not incur the risks associated with custody, although you will pay a slightly higher commission than if you purchase it directly on a centralised exchange.

Source: Seeking Alpha