Why Goldman Sachs' judgment on Ethereum is wrong.

Written by: Brendan on Blockchain Translated by: Baihua Blockchain

A few years ago, Ethereum was still Bitcoin’s “younger brother,” known for decentralized finance (DeFi), pixelated NFTs, and highly creative smart contract experiments, far from being a choice for “serious” investors. However, by 2025, Ethereum has become the focus of Wall Street.

Goldman Sachs perfectly embodied the traditional institutional mindset in 2021, when they denigrated Ethereum as “too volatile and speculative,” labeling it as “a solution looking for a problem.” Their research team believed that smart contract technology was being overhyped, with limited real-world applications, and that institutional clients had “no legitimate use cases” for programmable currency. They were not alone; JPMorgan referred to it as a “pet rock,” and traditional asset management firms avoided it altogether.

However, this view is as outdated as the early belief that the internet was a “flash in the pan.” Nowadays, Goldman Sachs is quietly building trading infrastructure based on Ethereum, and JPMorgan is processing billions of dollars in transactions through its Ethereum-driven Onyx platform, while asset management firms that once steered clear are now launching Ethereum-related products at breakneck speed.

The real turning point came in 2024, when the U.S. Securities and Exchange Commission (SEC) finally approved the Ethereum spot ETF. It may not sound like an exciting dinner table topic, but it means a lot. Unlike Bitcoin, which is simply categorized as “digital gold,” Ethereum presents a conundrum for regulators: how to regulate a programmable blockchain that supports everything from a decentralized exchange to a digital art marketplace? They finally solved the problem and released it, which is enough to say where this industry is headed.

The floodgates open for ETFs

For many years, there has been skepticism about the regulatory clarity surrounding Ethereum, particularly regarding the SEC’s ambiguous stance on whether Ethereum qualifies as a security. However, the approval of the ETF marks an important signal: Ethereum has matured into an investable asset for pensions, asset management companies, and even conservative family offices.

BlackRock (BlackRock) pioneered the launch of the iShares Ethereum Trust, and frankly, watching the launch was like witnessing the “fear of missing out” for institutional investors (FOMO) playing out in real time. Fidelity (Fidelity) followed, Grayscale (Grayscale) converted its existing products into ETFs, and suddenly, every major asset manager launched Ethereum products. But what’s even more striking is that these products aren’t limited to regular ETFs that track the price of ETH, and some also incorporate staking rewards, meaning that institutional investors can earn by holding their holdings just like DeFi participants.

Visual display of the price fluctuations of Ethereum before and after the adoption by institutions

Enterprises Fully Embrace

What is truly captivating is how companies integrate Ethereum into their actual business operations. This is not a speculative asset reserve like Bitcoin, but rather companies building digital infrastructure on Ethereum because it can solve real-world problems.

The true value of Ethereum for institutions lies in its infrastructure as a programmable Blockchain, capable of handling tokenized currencies, digital contracts, and complex financial workflows.

Institutions are rapidly joining this wave:

Franklin Templeton (, a company managing $1.5 trillion in assets, has tokenized one of its mutual funds on Ethereum, allowing investors to hold digital shares on the Blockchain and enjoy the benefits of transparency and 24/7 settlement.

JPMorgan, through its blockchain division Onyx, is testing tokenized deposits and asset swaps using Ethereum-compatible networks ) such as Polygon and their enterprise version of Ethereum, Quorum(.

Amazon AWS and Google Cloud now offer Ethereum node services, allowing enterprises to easily connect to the network without building their own infrastructure.

Microsoft collaborates with ConsenSys to explore enterprise use cases ranging from supply chain tracking to compliance smart contracts.

These are no longer just the domain of native crypto players. Traditional financial giants are awakening, realizing the fast, secure, and automated intermediary-free financial services offered by Ethereum.

The conversations among the CFOs of Fortune 500 companies have completely changed. They no longer question whether Blockchain makes sense, but rather ask how to quickly automate the application of smart contracts for vendor payments, supply chain financing, and internal processes. The efficiency gains are evident.

The gaming and entertainment industries are particularly aggressive. Mainstream game studios are tokenizing in-game assets, music platforms are automating royalty distribution, and streaming services are experimenting with decentralized content monetization. The transparency and programmability of Ethereum have almost overnight solved decades of problems in these industries.

Why is Ethereum so attractive to institutions?

![])https://img.gateio.im/social/moments-ba47093e7b9477f21cb1102224bc4c9f(

Ethereum allows assets ) whether it’s dollars, stocks, real estate, or carbon credits ( to be digitized, tokenized, and programmed. Combined with stablecoins ) primarily running on Ethereum such as USDC or USDT(, you suddenly have the cornerstone to build a whole new financial operating system.

• Need cross-border instant settlement?
• Need programmable payments based on contract milestones?
• Need transparency without losing control?
• Ethereum can do it all, and even more.

In addition to Layer 2 networks such as Arbitrum and Optimism ), these solutions expand Ethereum’s capacity, reduce costs, and significantly increase speed. Many institutions choose to build on Layer 2 networks to improve efficiency while still leveraging Ethereum’s liquidity and security.

The adoption of all this infrastructure cannot be separated from the foundational layer that most people overlook. Companies like BTCS Inc. are increasingly supporting traditional financial institutions with the necessary infrastructure to participate in products such as Ethereum and ETH ETFs. BTCS focuses on operating secure enterprise-level Ethereum validation nodes, maintaining network integrity and allowing institutions to participate in staking without dealing with technical complexities. Although they are not custodians or ETF issuers, their validation node operations support the functionality and credibility of Ethereum, enhancing the network resilience and transparency required by institutional investors.

Looking to the future

What is the future trend? I believe the direction is very clear. Ethereum is becoming the infrastructure layer for programmable finance. We are no longer just discussing cryptocurrency trading, but rather automated lending, programmable insurance, tokenized real estate, and around-the-clock supply chain financing.

The integration with central bank digital currency (CBDC) is another huge opportunity. As countries develop digital currency strategies, many are considering Ethereum-compatible solutions to enable seamless interaction between government-issued digital currencies and the broader DeFi ecosystem.

What’s more, this institutional embrace is driving long-awaited regulatory clarity across the industry. When major financial institutions build products around Ethereum, regulators have a strong incentive to develop a workable framework rather than a blanket restriction.

We are witnessing a technology that started as an experimental platform gradually becoming a critical financial infrastructure. The approval of ETFs is significant, but it is just the beginning. The real story is how Ethereum fundamentally changes the way financial services operate, how enterprises manage their operations, and how value flows in the global economy.

To be honest, I think we are still in the early stages of this transformation. The current institutional adoption is just the beginning of the large-scale integration of programmable currency with traditional finance.