On July 3, 2026 (Beijing time), the crypto market saw a broad rebound. According to Gate market data, Bitcoin (BTC) bounced from a 24-hour low of $59,776 to $61,507. Ethereum (ETH) surged even more sharply, rising from a low of $1,605 to $1,725, currently trading at $1,705.42—a daily gain of 4.45%. BTC is now quoted at $61,409.3, up 1.07% over 24 hours, with a market cap of roughly $1.23 trillion. ETH’s market cap stands at about $205.816 billion, accounting for 7.19% of the total market.
However, beyond daily price swings, what’s truly worth watching is Ethereum’s long-term value relative to Bitcoin—the ETH/BTC exchange rate. By mid-2026, this ratio is hovering near a multi-year low of roughly 0.026, a steep drop from about 0.08 in 2021 and 0.15 in 2017. In other words, one ETH now exchanges for only about a third as much BTC as it did four years ago.
Against this backdrop, BitMine Chairman Tom Lee stated on July 3 that there are strong reasons for the ETH/BTC ratio to strengthen in the second half of 2026, predicting the ratio will continue rising throughout the year.
Why ETH/BTC Is the Key Indicator for Market Style Shifts
The ETH/BTC ratio essentially measures the market’s relative pricing between two value propositions: "smart contract platforms" and "digital gold." Bitcoin’s core narrative is "store of value"—fixed supply, decentralization, and censorship resistance. Ethereum’s narrative is more complex: it’s a smart contract platform, a settlement layer, and the backbone for stablecoin issuance, DeFi lending, RWA tokenization, and other real-world applications.
When risk appetite rises and capital seeks growth assets, ETH tends to outperform BTC. Conversely, when the market turns risk-averse and funds flow into "crypto safe havens," BTC becomes relatively stronger. As a result, the ETH/BTC ratio is one of the most direct windows into shifts in crypto market style.
Tom Lee believes ETH’s narrative as "money" is gaining traction—this positioning differs from Bitcoin’s singular "digital gold" identity, highlighting ETH’s multi-faceted role as a settlement medium, collateral asset, and payment tool in real economic activity. If this narrative holds, a rebound in ETH/BTC would not just be a technical bounce, but a structural revaluation.
Three Catalysts: Stablecoins, RWA, and Ecosystem Upgrades
Stablecoin Ecosystem Continues Expanding
Stablecoins are one of Ethereum’s most critical use cases. As of May 2026, global stablecoin market capitalization surpassed $320 billion, with USDT commanding about 58.9% market share and nearly $190 billion in circulation. In February 2026, global on-chain stablecoin transaction volume reached roughly $1.8 trillion.
Ethereum hosts about $156.7 billion in stablecoin value, representing 49.5% of the $315.1 billion total stablecoin supply. Stablecoins have rapidly evolved from internal settlement tools at exchanges to globally circulating payment media. In 2025, annual stablecoin transaction volume hit approximately $33 trillion, outpacing the combined $25.5 trillion processed by Visa and Mastercard.
On July 1, 2026, Open Standard—a consortium of over 140 financial and tech companies including Stripe, Visa, BlackRock, and Coinbase—announced the launch of the Open USD (OUSD) stablecoin project. This event marks stablecoins’ leap from crypto-native tools to mainstream financial infrastructure. Every dollar of stablecoin issued requires corresponding on-chain settlement and clearing, positioning Ethereum—the largest stablecoin custody network—to benefit from this expansion.
Accelerating RWA Tokenization
Real-world asset (RWA) tokenization is one of the fastest-growing sectors in crypto for 2026. By June 2026, the total market cap of on-chain tokenized RWAs peaked at $31.8 billion, up roughly 589% from just $4.3 billion in early 2025. This growth far outpaces DeFi and stablecoins over the same period.
Ethereum currently holds about 53% of the crypto industry’s tokenized RWA value. Among asset classes, public debt (government bonds and money market funds) remains the largest anchor, with a market cap of about $17 billion, nearly 60% of the total. Tokenized public equities saw over 170% year-to-date growth, covering around 500 products. Private credit reached $4.23 billion, with a 52% DeFi utilization rate, making it one of the most active RWA collateral categories.
The core logic of RWA tokenization is simple: once traditional financial assets (bonds, equities, credit) move onto the blockchain, they require on-chain issuance, trading, and settlement. As the most mature smart contract platform, Ethereum is the natural choice for custody. Every $1 of RWA brought on-chain increases demand for the Ethereum network—whether for gas fees, settlement efficiency, or contract interaction.
Ongoing Innovation in the Ethereum Ecosystem
In May 2026, Ethereum mainnet activated the Pectra upgrade—the most EIP-packed hard fork in Ethereum’s history. Pectra introduced EIP-7702, allowing externally owned accounts (EOAs) to temporarily execute smart contract code, enabling features like batch transactions, gas sponsorship, and social recovery. Pectra also doubled blob throughput, raised the validator maximum effective balance from 32 ETH to 2,048 ETH, and significantly shortened validator onboarding times.
More importantly, Ethereum’s Glamsterdam roadmap aims to raise the gas limit from about 60 million to 200 million, tripling Layer 1 capacity and reducing gas costs for complex DeFi transactions by 60–70%. This will dramatically boost mainnet processing power, enabling higher-frequency stablecoin transactions and RWA settlements.
On-chain data already confirms ecosystem activity: during the 2025–2026 market cycle, Ethereum’s daily active address count consistently exceeded 1 million, peaking above 1.3 million—a historic high. The decoupling between network activity and price trends signals that fundamentals are building, not weakening.
What Factors Could Impact ETH’s Performance Relative to BTC?
ETH’s performance versus BTC isn’t a one-way street. Several factors significantly constrain it.
The macro interest rate environment is the primary variable. In early July 2026, the US Federal Reserve’s benchmark rate remained unchanged at 3.50%–3.75%, with expectations for rate cuts cooling sharply. In a high real-rate environment, capital prefers low-risk assets, putting pressure on valuations for high-beta assets like ETH. However, US nonfarm payrolls for June, released on July 3, showed an increase of just 57,000—about half economists’ forecasts. This "bad news" actually boosted expectations for looser liquidity, driving rebounds in both BTC and ETH.
ETF fund flows are diverging. On July 1, US spot Ethereum ETFs saw net inflows of $14.89 million, ending nine consecutive days of outflows. BlackRock’s ETHA alone saw $36.63 million in single-day inflows. Meanwhile, Bitcoin ETFs recorded net outflows of $296 million on the same day. On July 2, Ethereum ETFs netted inflows of 21,568 ETH, while Bitcoin ETFs saw outflows of 6,165 BTC. If this divergence persists, it will directly support the ETH/BTC ratio.
Supply dynamics also deserve attention. Ethereum’s supply is expanding at an annualized rate of nearly 0.2%, but rising network activity could turn it deflationary. ETH 2.0 total staked coins have surpassed 25.43 million, currently valued at about $4.898 billion. Ongoing growth in staking reduces circulating supply in the secondary market, providing structural price support.
On the institutional side, Citi recently cut its 12-month Bitcoin price target from $112,000 to $82,000 and lowered its Ethereum forecast from above $3,000 to $2,240. Standard Chartered expects Bitcoin could drop toward $50,000 in the short term, and Ethereum toward $1,400. These downgrades reflect current macro headwinds, but also suggest that pessimism is already largely priced in.
What On-Chain and Market Indicators Should Investors Watch?
To track ETH/BTC movements, the following indicators are highly relevant.
The ETH/BTC ratio itself is the most direct observation window. The current ratio is near its historical low at 0.026. Technical analysis shows ETH/BTC is in a major accumulation zone on higher timeframes. Breaking above 0.030 could signal a trend reversal.
ETF fund flows are a barometer of institutional demand. Keep monitoring daily net inflows/outflows for US spot Ethereum ETFs, especially leading products like BlackRock’s ETHA.
Total value locked in stablecoins and RWAs is a core indicator of Ethereum’s real usage demand. Whether stablecoin market cap continues to break $320 billion and whether RWA tokenization can expand beyond $31.8 billion will directly determine ETH’s demand base as a "settlement asset."
Network activity includes daily active addresses, transaction volume, and gas fee levels. Currently, daily active addresses remain above 1 million. If activity keeps rising while gas fees stay low (thanks to scaling upgrades), it shows the network is efficiently supporting more real-world applications.
Staking scale reflects long-term holder confidence. ETH 2.0 total staked coins have surpassed 25.43 million. Continued growth in staking means ongoing tightening of circulating supply.
Conclusion
The ETH/BTC ratio has fallen to a historic low near 0.026, highlighting Ethereum’s significant underperformance relative to Bitcoin over the past year—but also signaling that a reversal may be building. Stablecoin ecosystem growth past $320 billion, RWA tokenization reaching $31.8 billion, and the Pectra upgrade—all three structural shifts are reshaping Ethereum’s fundamentals.
Tom Lee’s view is not isolated: on-chain lending and RWA tokenization activity on Ethereum saw strong growth in the first half of 2026, diverging from price action that’s down 63% from historic highs. This "price down, on-chain up" split often precedes a value re-rating.
Of course, macro interest rates, ETF fund flows, and supply dynamics remain significant uncertainties. ETH/BTC’s recovery won’t be linear, but tracking the above on-chain and market indicators will help investors navigate style shifts amid market volatility.
FAQ
Q1: What is the current ETH/BTC exchange rate?
As of July 3, 2026, the ETH/BTC ratio is about 0.0277 (1,705.42 / 61,409.3), near multi-year lows. This is a sharp drop from about 0.08 in 2021 and 0.15 in 2017.
Q2: Why is Tom Lee bullish on the ETH/BTC ratio?
BitMine Chairman Tom Lee stated on July 3 that there are strong reasons for ETH/BTC to strengthen in the second half of 2026. The core logic is that ETH’s monetary narrative is gaining market attention, and three catalysts—stablecoin growth, RWA tokenization, and ecosystem innovation—are all reinforcing ETH’s store-of-value attributes.
Q3: How do stablecoins and RWAs affect ETH’s price?
Expansion of stablecoins and RWAs means more real economic activity is settling on Ethereum. Every stablecoin transfer and RWA transaction consumes gas fees, increasing demand for ETH. As of June 2026, on-chain RWA market cap reached $31.8 billion; stablecoin market cap broke $320 billion.
Q4: What does the Pectra upgrade mean for Ethereum?
Pectra, activated in May 2026, is an Ethereum upgrade with the most EIPs in history. Key changes include introducing EIP-7702 for account abstraction, raising the validator maximum staking limit from 32 ETH to 2,048 ETH, and doubling blob throughput.
Q5: How should investors monitor ETH/BTC trends?
It’s recommended to watch four dimensions: the technical position of the ETH/BTC ratio itself, daily fund flows for US spot Ethereum ETFs, total value locked in stablecoins and RWAs on Ethereum, and network activity indicators like daily active addresses.
