Firi Weekly: Ethereum Rallies Past $4,000

Trump's Retirement Reform:
- The president is opening the $9 trillion 401(k) retirement market to crypto investments, potentially paving the way for massive capital inflows into the crypto market.
Ethereum Hits 4-Year High:
- Ether surges past $4,000 to $4,340, reaching its highest level since November 2021 as three corporate treasuries accumulate 2.1 million Ether.
SEC Clarifies Staking Rules:
- Liquid staking receives regulatory green light as new chairman Paul Atkins advances promise to make the U.S. the crypto capital of the world.
DeFi Gets Wall Street Credibility:
- S&P Global makes history with first-ever credit rating for a decentralized finance (DeFi) protocol, assigning a B- rating to the $8 billion Sky stablecoin protocol.

Last Week’s Big Three

Trump’s Pension Push: President Trump signed an executive order Thursday directing the Department of Labor (DOL) and U.S. Securities and Exchange Commission (SEC, the federal agency that regulates financial markets) to revise guidance allowing 401(k) retirement accounts to invest in digital assets alongside private equity and real estate. The DOL has 180 days to complete its review, meaning Americans would not gain immediate access to crypto investments through their retirement funds.

This development could unlock a portion of the $9 trillion 401(k) market for digital assets, creating significant buying pressure. The actual impact depends on final allocation limits and specific investment rules yet to be determined.

Another SEC Victory: Following last week's announcement of "Project Crypto" by newly-appointed SEC Chairman Paul Atkins, the commission delivered another win for the industry. The SEC clarified that liquid staking—where users deposit crypto with third-party providers in exchange for receipt tokens—does not require securities law disclosures.

This ruling matters because securities classification has plagued the crypto industry for years, triggering stringent compliance requirements. By clarifying that liquid staking is exempt from securities laws, the SEC removes a major regulatory hurdle for one of DeFi's core functions.

S&P Global Breaks New Ground: In an industry first, S&P Global Ratings issued a B- credit rating to Sky Protocol, formerly Maker, the decentralized protocol behind $8 billion in stablecoin issuance. The rating agency also assigned a "4" score for the stablecoin's dollar peg stability on a scale where "1" represents very strong and "5" indicates weak. For context, USDC, the second-largest stablecoin, has a "2" rating. The Sky stablecoin, called USDS, is not backed entirely by money in a bank account or treasuries like other stablecoins, but instead is backed mainly by a basket of other cryptocurrencies.

This unprecedented move may lend traditional financial credibility to an ecosystem — namely Sky — which, like the rest of the crypto market, has long operated outside conventional frameworks.

Behind the Charts

Chart 1: Bitcoin and Ethereum Prices from July 1 to August 10

Last week, Ethereum broke through $4,000 for the first time since December 2024, reaching $4,340 early Monday morning — its highest price since the November 2021 all-time high of $4,875.

In our view, capital appeared to rotate from Bitcoin to Ethereum, with Bitcoin trading sideways while ETH rallied. However, Bitcoin surged overnight, approaching its recent all-time high of roughly $122,838, set last month.

Chart 2: Total Cryptocurrency Market Capitalization

The rally pushed total crypto market capitalization to a new all-time high of $4.06 trillion, slightly exceeding July's previous record.

In our view, several factors are driving the recent rise in crypto prices. Trump’s pension reform and an improving U.S. regulatory environment are playing a positive role. The market is also benefiting from its high correlation with technology stocks, which have performed strongly. Additional support comes from robust inflows into U.S. Bitcoin and Ethereum exchange-traded funds (ETFs), accelerating stablecoin adoption in traditional finance, and corporate treasury accumulation — as shown for Ethereum in Chart 3 below. However, market participants should remain mindful of the risks outlined in our ‘On Our Radar’ section.

Chart 3: The Three Largest Ethereum Treasuries

Corporate Ethereum accumulation accelerated dramatically since June, with three publicly-traded firms now holding more Ether than the Ethereum Foundation itself. Bitmine Immersion Technologies, SharpLink Gaming, and The Ether Machine collectively own 2.1 million Ether worth $9 billion. This treasury trend, inspired by Bitcoin corporate reserves, represents a key driver of Ethereum's recent price surge.

A Number to Remember

$200 million

Ripple has acquired stablecoin payments platform Rail for $200 million, with Rail’s CEO projecting it will process over 10% of global stablecoin payments in 2025. The deal follows Ripple’s $1.25 billion purchase of prime broker Hidden Road in April and the launch of its RLUSD stablecoin last year, underscoring the company’s ambition to expand alongside the booming stablecoin market.

On Our Radar

On our radar for the week ahead:

Will Trump Achieve a Breakthrough in Alaska on Friday? President Trump meets with Russian President Vladimir Putin in Alaska—the first U.S.-Russia presidential summit since the February 2022 Ukraine invasion. While both leaders will discuss ending the war, markets remain skeptical due to Putin's limited interest in peace negotiations so far.
What Happens to U.S.-China Tariffs? The 90-day U.S.-China tariff truce expires tomorrow, potentially triggering an increase from 10% to 34% on Chinese imports unless negotiators reach a trade deal or extension. Failure to reach an agreement could significantly impact global markets because of the magnitude of U.S.-China trade.
What Will U.S. Inflation Data Reveal? Tomorrow's Consumer Price Index (CPI) release will show July inflation data, offering crucial insight into how Trump's tariffs affect price pressures. The Federal Reserve (Fed, the U.S. central bank) needs sufficiently low inflation to justify a September rate cut. An upside surprise could eliminate rate cut prospects, pressuring risk assets.

Mads Eberhardt11/08/2025

Should not be considered financial advice. Crypto may involve high risk.