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Ethereum is riding high.

Not only did it notch a new all-time high of $4,946 on Sunday, but Wall Street’s growing embrace of digital assets such as stablecoins is expected to drive the price to new heights.

Ethereum last reached a record high in November 2021.

Since then, the amount of stablecoins on the blockchain has ballooned 74% to $143 billion, and real-world assets, tokenised versions of traditional financial assets like US Treasury bonds, have grown from practically nothing into a $7.6 billion market.

It’s a sign Ethereum’s DeFi ecosystem is maturing, and investors are taking notice.

“Stablecoins are the ‘ChatGPT’ of crypto,” Tom Lee, chair of Ethereum treasury firm BitMine, previously told DL News. “And Ethereum is the backbone. It’s legally recognised, and has zero downtime.”

It’s against this backdrop that Ethereum bulls celebrated the new record this weekend.

While Fed Chair Jerome Powell’s Jackson Hole remarks sparked the all-time high break, Ethereum treasury companies drove the bulk of the prior rally by gobbling up Ether at an unprecedented rate.

The growth in stablecoins and real-world assets on Ethereum is all part of a larger trend. As time goes on, less of the value on Ethereum is coming from speculative assets like DAO tokens or memecoins, and more is coming from traditional assets.

Activity on more nascent blockchains, like Solana, is still dominated by speculation on memecoins. They also host a much smaller number of stablecoins, which might be among the reasons they haven’t received the same institutional interest.

Of course, big technical improvements — such as Ethereum switching from Proof of Work to Proof of Stake — have happened in the interim. But these haven’t altered the blockchain’s main value proposition: Becoming a universal settlement hub for finance.

To be sure, the favourable crypto regulatory environment under President Donald Trump has also helped considerably.

Back in 2021, then-SEC Chair Gary Gensler’s regulation through enforcement stance had Wall Street keeping its distance, lest it get caught in the crossfire.

So the big question now is, will the trend continue?

If you believe analysts, the answer is a resounding yes.

Coinbase’s institutional arm predicts stablecoins will swell into a $1.2 trillion market by 2028, while Matt Hougan, Bitwise’s chief investment officer, sees the dollar-pegged asset market hitting $2.5 trillion in “no time.”

As for real-world assets, the opportunity could be much bigger.

An April report from Ripple and Boston Consulting Group forecast the market for tokenised assets, stablecoins and other real-world assets combined, will hit $19 trillion by 2033.

With Ethereum already hosting by far the biggest DeFi ecosystem, it’s in the best position to benefit.

Top DeFi stories of the week

This week in DeFi governance

VOTE: Uniswap DAO votes to establish new legal entity called DUNI

VOTE: Arbitrum DAO votes to remove cost cap on Arbitrum Nova, update upgrade executors, and disable legacy Tether bridge

VOTE: Stargate DAO votes to sell protocol to LayerZero

Post of the week

Crypto Twitter reacts to Kanye West’s disastrous YZY memecoin launch.

Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.