ETH Rallies 80%: Can DATs and Stablecoin Regulation Sustain the Momentum

Ethereum’s market sentiment has improved significantly over the past six months. Trading around $2,000 in March while Bitcoin hovered near $80,000, ETH appeared to be losing ground in the broader crypto narrative. Today, the picture looks different, with ETH trading above $4,300. The ETH/BTC ratio has climbed 80% in the same period, moving from 0.20 to 0.36, signaling renewed confidence in Ethereum’s value proposition relative to Bitcoin. 

Two catalysts are driving this reversal: Digital Asset Treasuries (DATs) accumulating ETH and the passage of stablecoin legislation in the U.S. But this raises critical questions about sustainability. Can DAT accumulation and regulatory clarity alone justify Ethereum’s current momentum? More importantly, is the network infrastructure ready to handle an influx of new users and higher transaction volumes? 

In this edition of Crypto Market Monitor, we explore whether this momentum rests on solid foundations or fleeting market dynamics. 

Corporate treasuries are taking an active approach to ETH accumulation. Public companies such as BitMine Immersion Technologies (NYSEAMERICAN: BMNR) and SharpLink Gaming (NASDAQ: SBET) are issuing equity to purchase ETH, mirroring the BTC treasury playbook but with a key difference. Unlike Strategy (MSTR), which passively holds BTC, DATs are exploring staking and DeFi protocols to generate yield on their holdings. 

This distinction matters. ETH based DATs function like active portfolio management, where risk-reward optimisation determines returns. Deploying ETH to a lending protocol carries different smart contract risks and rewards compared to staking with a validator. These strategic choices are creating performance variations across different treasury operations, making DATs a more complex investment vehicle than simple asset accumulation strategies. 

Ethereum treasury companies collectively hold around 5.66 million ETH, equivalent to 4.68% of total supply. Meanwhile, spot Ethereum ETFs hold roughly 6.81 million ETH, or 5.63% of the total supply. 

Figure 1: Total ETH holdings by public companies hovers around 5.66 million. 

Source: The Block (9 October 2025) 

How DATs Work 

Understanding how DATs are valued reveals both their attractiveness and inherent risks. These vehicles generally trade above the market value of their underlying ETH holdings – a spread measured by the multiple-of-net-asset-value (mNAV) metric. Investors pay this premium based on the leverage these structures provide and expectations around future Ethereum ecosystem participation. 

This premium, however, creates a precarious dependency. DATs need elevated mNAV levels (a level greater than 1) to continue raising capital through equity offerings. When ETH price declines and mNAV compresses, the ability to raise funds diminishes. 

Reduced capital inflows cause the equity premium to collapse. When DATs can no longer raise capital at a premium to NAV, their growth model breaks down. Companies trading at discounts may choose to buy back shares using treasury assets, or face shareholder pressure for asset liquidation. Additionally, firms with debt/dividend obligations or insufficient operating revenue may be forced to liquidate holdings to meet expenses, creating downward pressure on ETH prices.  

This selling pressure extends beyond spot markets – it can disrupt staking operations and DeFi protocol stability, potentially amplifying losses across the ecosystem. 

Yield Generation 

To offset these risks and create sustainable revenue streams, treasuries are increasingly turning to validator staking. Staking rewards represent the baseline yield available from holding ETH. Since November 2024, these returns have been trending downward as total staked ETH increases on the network. Current validator earnings sit around 3%, derived from both base staking rewards and priority fees collected from transactions. 

Figure 2: Percentage of total ETH supply staked 

Source: The Block (9 October 2025) 

This institutional shift toward staking is gaining momentum. Grayscale announced on October 6 that staking functionality is now integrated into its Ethereum Mini Trust ETF (ETH) and Ethereum Trust ETF (ETHE). Investors in these products can now capture staking yields directly, choosing between automatic reinvestment or receiving cash distributions—a development that brings crypto-native yield mechanisms into traditional investment structures. 

While institutional players are positioning themselves through DATs and staking, the underlying network is demonstrating its capacity to handle real-world usage. Daily transaction volume on Ethereum has crossed the 1.5 million mark, exceeding the previous peak established in May 2021. More telling is the value being transferred: stablecoin transfers have surged past $60 billion in a single day in Sep 2025—more than double of YTD 2025 average. This volume spans the full spectrum of use cases, from small cross-border remittances to large-scale institutional settlements, indicating that Ethereum is serving as infrastructure for diverse financial activity. 

Figure 3: Transaction count on Ethereum Mainnet 

Source: The Block (9 October 2025) 

The network’s ability to absorb this growth without deteriorating user experience stems from scaling improvements at multiple layers. Layer-2 networks are posting increasing amounts of blob data to Ethereum’s base layer, which allows them to process higher transaction counts without creating fee spikes. 

Figure 4: Top gas guzzler smart contracts on Ethereum Mainnet 

Source: The Block (9 October 2025) 

Following the Pectra upgrade in May, which raised blob inclusion targets, Ethereum blocks are now routinely carrying more blob data. This expansion is simultaneously increasing throughput capacity and reducing transaction costs across the Layer-2 ecosystem, creating the conditions for sustained usage growth without pricing out smaller participants. 

Much of this transaction growth is being fueled by stablecoin activity. Ethereum currently hosts approximately 65% of all stablecoin supply, making it the dominant settlement layer for dollar-denominated digital assets. The passage of the GENIUS Act in the U.S. and broader acceptance of stablecoins as viable payment alternatives have expanded interest among both retail users and commercial entities. This concentration of stablecoin activity is creating organic demand for ETH as users need it for transaction fees and as collateral in various protocols. 

Figure 5: Stablecoin supply by chain  

Source: The Block (9 October 2025) 

However, Ethereum’s stablecoin leadership position faces emerging challenges. The rise of application-specific blockchains designed exclusively for stablecoin settlement (for example – Plasma), along with stablecoins built natively on new generation blockchains, exposes weaknesses in Ethereum’s architecture. These alternatives are gaining traction precisely because they address pain points that Ethereum hasn’t fully solved, calling into question whether stablecoin growth will continue benefiting Ethereum as much as it has historically. 

The fee dynamic illustrates this tension. While Ethereum’s transaction costs have decreased, they remain several orders of magnitude higher than alternative networks. For users making frequent, smaller-value stablecoin transfers, these fees become prohibitive.  

Figure 6: Transfer costs on Ethereum still remain higher than alternative networks 

Source: The Block (9 October 2025) 

Layer-2 solutions offer a partial answer—providing the low costs and high speeds necessary for stablecoin scaling—but they bring their own complications. Activity on Layer-2s doesn’t directly translate to base layer activity on Ethereum, meaning the network doesn’t capture the same economic value from L2 stablecoin transactions as it would from mainnet usage. 

Recognising these scaling challenges, Ethereum developers are targeting the Fulu-Osaka (Fusaka) upgrade for release on 3rd December 2025 tentatively. The centerpiece of this upgrade is PeerDAS (Data Availability Sampling), which addresses validator efficiency at the consensus layer. Rather than requiring validators to download complete blob datasets for verification, PeerDAS enables them to work with data samples. This approach cuts validator operational costs while accelerating data retrieval speeds – improvements that become increasingly critical as blob usage expands across Layer-2 networks. 

Ethereum has recaptured institutional attention and market momentum. Sustaining this trajectory depends on two primary drivers continuing: DATs maintaining their ETH accumulation programs and applications choosing Ethereum as their stablecoin settlement layer. The stablecoin scaling challenge remains real – technical constraints limit how much transaction throughput the network can handle for these transfers. 

Yet these constraints haven’t prevented overall network usage from climbing. Ethereum processes higher transaction volumes by optimising for operations that require less computational intensity, which keeps costs manageable for users. The infrastructure is positioning itself to absorb both increased transaction counts and more computation-heavy operations through two parallel paths: expanded blob data capacity on Layer-2s and mainnet gas limit increases. 

Both completed upgrades and the upcoming Fusaka release are building a technical foundation for renewed ecosystem engagement. The question isn’t whether Ethereum can scale – the pieces are falling into place. The question is whether the economic incentives around DATs and stablecoin adoption will remain aligned long enough to translate into token value proposition. 

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