Ethereum hosts the largest pools of stablecoins and decentralized finance (DeFi) value, a crucial factor for firms handling large positions.
Despite newer blockchains promising lightning-fast transactions and lower fees, major financial institutions continue to build and deploy on Ethereum. The reason isn’t raw speed, it’s liquidity and capital depth.
Transactions per second can make blockchain engineers excited, but institutional money doesn’t chase throughput alone. According to Kevin Lepsoe, founder of ETHGas and a former Morgan Stanley derivatives executive, institutions prioritize where the capital already is and that remains firmly on Ethereum.
Ethereum hosts the largest pools of stablecoins and decentralized finance (DeFi) value, a crucial factor for firms handling large positions. Deep liquidity means bigger trades can happen with lower slippage and tighter pricing making it safer for institutions to move capital without distortions.
In contrast, faster blockchains such as Solana initially drew excitement, especially from retail traders during NFT and memecoin booms, but haven’t been able to match Ethereum’s liquidity depth over time.
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The presence of big players also reinforces this preference.
Previous crypto rallies were largely defined by aggressive retail speculation. This time, however, the market’s next chapter appears set to be driven by deeper institutional participation. Rather than chasing short-term price swings, large financial players are focusing on practical blockchain applications such as stablecoins and tokenized real-world assets (RWAs).
Even the world’s largest asset manager, BlackRock, is doubling down on the RWA thesis. Its USD Institutional Digital Liquidity Fund (BUIDL), a tokenized U.S. Treasury product, initially launched on Ethereum before expanding to multiple blockchain networks. Notably, Ethereum still accounts for more than 30% of BUIDL’s total market capitalization.
Traditional Wall Street firms and global asset managers are increasingly using Ethereum for tokenized funds, bank-issued stablecoins, and other institutional products. These projects anchor more capital into Ethereum’s ecosystem and make it harder for speed-focused challengers to pull that capital away.
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Ethereum’s ecosystem is also evolving technically. While layer-2 solutions once helped reduce fees, they spread capital across multiple chains. Now, efforts to scale the main Ethereum chain, including future protocol upgrades designed to boost throughput while maintaining decentralization, are attracting attention from developers and institutions alike.
In the high-stakes world of big finance, being where the money already flows remains the dominant factor.
